ageas SA/NV

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ifrs-full:NoncontrollingInterestsMember 5493005DJBML6LY3RV36 2021-12-31 ifrs-full:NoncontrollingInterestsMember iso4217:EUR iso4217:EUR xbrli:shares Connecting for impact Annual Report 2021 Ageas At the heart of society, in the lives of people 3 Ageas Annual Report 2021 Table of Contents A Report of the Board of Directors 8 1 Message from the CEO and Chairman 9  2 Keynancialsandhighlights 12  3 StrategyandbusinessmodelofAgeas 20  4 Sustainabilityattheheartofeverythingwedo 24  5 CorporateGovernanceStatement 64 B Consolidated Financial Statements 2021 85  Consolidatedincomestatement 87  Consolidatedstatementofcomprehensiveincome 88  Consolidatedstatementofchangesinequity 89  Consolidatedstatementofcashow 90 C General Notes 91  Covid-19 92  1 Legalstructure 93  2 Summaryofaccountingpolicies 94  3 Acquisitionsanddisposals 120 4 Risk Management 122  5 Regulatorysupervisionandsolvency 154  6 Remunerationandbenets 158  7 Relatedparties 172  8 Informationonoperatingsegments 174 D NotestotheConsolidatedstatementofnancialposition 186  9 CashandCashEquivalents 187  10 Financialinvestments 188  11 Investmentproperty 194  12 Loans 196  13 Equityaccountedinvestments 198  14 Reinsuranceandotherreceivables 201  15 Accruedinterestandotherassets 202  16 Property,plantandequipment 203  17 Goodwillandotherintangibleassets 205  18 Shareholders’equity 208  19 Insuranceliabilities 213  20 Subordinatedliabilities 218  21 Borrowings 221  22 Currentanddeferredtaxassetsandliabilities 223  23 RPN(I) 225  24 Accruedinterestandotherliabilities 227  25 Provisions 228  26 Non-controllinginterest 229  27 Derivatives 230  28 Commitments 232  29 Fairvalueofnancialassetsandnancialliabilities 233 Ageas Annual Report 2021 5 Ageas Annual Report 2021 E Notes to the Consolidated Income Statement 235  30 Insurancepremiums 236  31 Interest,dividendandotherinvestmentincome 239  32 Resultonsalesandrevaluations 240  33 Investmentincomerelatedtounit-linkedcontracts 241  34 Feeandcommissionincome 242  35 Otherincome 243  36 Insuranceclaimsandbenets 244  37 Financingcosts 245  38 Changeinimpairments 246  39 Feeandcommissionexpenses 247  40 Staffexpenses 248 41 Other expenses 249  42 Incometaxexpenses 251 F Notestoitemsnotrecordedintheconsolidatedstatementofnancialposition 252  43 Contingentliabilities 253  44 Eventsafterthedateofthestatementofnancialposition 256  StatementoftheBoardofDirectors 257  IndependentAuditor’sReport 258 G ageasSA/NVStatutoryAccounts2021 263  Generalinformation 264  Disclosureonitemsinthestatementofnancialpositionandincomestatementandregulatoryrequirements 265  Conictofinterest 303  StatutoryAuditor’sReport 304 H Other information 308  Forward-lookingstatementstobetreatedwithcaution 309  Availabilityofcompanydocumentsforpublicinspection 310  Registrationofsharesindematerialisedform 311  GRIIndex 312  UNGCProgressreportIndex 315  PSIIndex 318  GlossaryandAbbreviations 320 BEL 20 listed company employees Life insurance, Non-Life insurance & Reinsurance years of heritage annual inﬂows (at 100%) EUR billion customers million About Ageas Our values Our purpose 6 Ageas Annual Report 2021 AgeasisalistedinternationalinsuranceGroupwithaheritagespanning closeto200years.WeofferRetailandBusinesscustomersLifeand Non-Lifeinsuranceproductsandwearealsoengagedinreinsurance activities.Ourcustomersareattheheartofourbusiness,andourproducts andservicesaredesignedtoanticipate,manageandcovertheirrisks throughawiderangeofsolutionsdesignedfortheirneeds,bothtodayand inthefuture. WeareoneofEurope'slargerinsurancecompaniesandwearealso wellrepresentedinAsia.Intotal,Ageasisonthegroundin14countries (Belgium,theUK,France,Portugal,Turkey,China,Malaysia,India, Thailand,Vietnam,Laos,Cambodia,Singapore,andthePhilippines) throughacombinationofwhollyownedsubsidiariesandlong-term partnershipswithstrongnancialinstitutionsandkeydistributors.Ageas ranksamongthemarketleadersinthecountriesinwhichitoperates. Everyday,morethan40,000skilledandcommittedemployeesareatthe serviceofnearly45millioncustomers.OurGrouphasatitsfoundationaset ofcorevalues-Care,Dare,Deliver,andShare–representingwhoweare andhowwework. Asa“Supporterofyourlife”weseektocreatesocialandeconomicvaluefor ourcustomers,employees,partners,investorsandsocietyatlarge. In2021,AgeasreportedannualinowsclosetoEUR40billion(at100%). AgeasislistedonEuronextBrusselsandisincludedintheBEL20index. United Kingdom Belgium Portugal France Turkey India Malaysia Philipinnes JointventuresinLaos,CambodiaandSingapore China Vietnam Thailand Active in 14 countries in Europe & Asia Ageas Annual Report 2021 7 Ageas Annual Report 2021 8 A Report of the Board of Directors The Ageas Annual Report 2021 includes the Report of the Board of Directors of Ageas prepared in accordance with the legal and regulatory requirements applicable in Belgium (pursuanttoarticle3:6and3:32oftheBelgianCodeof Companies and Associations) and the Ageas Consolidated FinancialStatements2021,withcomparativeguresof2020, prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, as well as the Financial Statements of ageas SA/NV. Thenon-nancialdisclosurereportsinaccordancewiththe EUdirectiveonnon-nancialinformation,theEUtaxonomy regulation, national ESG related legislation and regulatory recommendationssuchastheEuronextguidanceonESG reporting issued in January 2020. The information and data in the Annual Report is prepared in accordance with the GRI Standards: Core 1 . All amounts in the tables of this Annual Report are denominated in millions of euros, unless stated otherwise. 1 The GRI Standards represent global best practice for reporting publicly on a range of economic, environmental and social impacts. Sustainability reporting based on the Standards provides information about an organization’s positive or negative contributions to sustainable development. Option core entails that at least one indicator for each material topic is included in the annual report. DetailedinformationcanbefoundintheGRIcontentindexinsectionH. Ageas Annual Report 2021 9 Dear stakeholder, 2021wastheyearthatwecompletedthenalphaseofourConnect21 plan,andwedesignedthenextchapterintheAgeasstory.Wereected onthetrendscomingourwayandfocusedonopportunitiesforlong-term sustainablegrowth.Wetranslatedthisintothenewplan,Impact24,that willtakeusforwardforthenext3yearsandbeyond.Aplanisalwaysbuilt withinaglobalcontext…andtheworlddidnotstandstillduringthepast12 months.Itmovedfasterthanever. New challenges but also new hope If2020wasthe‘yearofCovid’,then2021shouldhavebeenthe‘year theworldgotbacktoanewnormal’.Forawhileitlookedlikeitmight,butas itturnedout,Covidvariantswereheretostay.Theglobaleconomybegan torecovermorequicklyandmorestronglythanexpected,butatadifferent pacemarkettomarket.Asworldtradecameoutofhibernation,ination startedtorise. Covidactedasacatalystforwideningsocialinequalitywithsignicantgaps inincome,health,andeducation.Asaninsurer,everyoneofthesefactors needsourfullattention.Supporting our stakeholders by protecting them today and preparing them for the world of tomorrow has been ourreasonofexistenceforalmosttwocenturies,andthisbecomes even more tangible today. 2021wasalsotheyearthatclimatechangeemergencyreachednewheights withtheambitionofamaximumof1.5°Criseintemperaturesnolonger needingelaboration.As190+nationsgatheredinGlasgowforCOP26to reafrmtheircommitmenttomaintainthiscriticalthreshold,theworldgot awake-upcallforacceleratedaction.Assizableinvestors,andgivenour proximitytoalargecustomerbase,Ageashasasignicantroletoplay in closing the information gap and in stimulating our customers in the transition towards a more sustainable world. Thisyearwefeltthefullforceofclimatechange,asoodingonamassive scaledevastatedanddestroyedthehomesofsomanyofourcustomersin BelgiumandintheUK.Ourheartgoesouttothosewhohavelostrelatives andfriends.Thankstotheextraordinarysupportofouremployees,agents, brokers,andpartners,wedideverythingwecouldtoprovidetheserviceand assistanceourcustomersneededatthismostcriticaltime. Sustainability at the centre Asaninsurer,wehaveacommitmenttowardsourstakeholdersto maintainasustainablebusinessthatisbuilttolast.We also have a duty of responsibility towards future generations to act now on global societal challenges.Thestrategicexerciseweperformedlastyearallowed ustotranslatethisintoanactionableplanwithambitioustargets. Sustainabilityhasbeenintegratedintoallaspectsofournewstrategy, Impact24.We want to be a diverse, inclusive and Great place to Grow for all our employees.Weareexpandingourofferingofsustainable productsthatcanassistourcustomersinthetransitiontowardsamore sustainableworld.WemadeacommitmenttobecomeGHGneutralinour ownoperationsandtoinvestuptoEUR10billionby2024inESGinitiatives. Atthetimewemadethiscommitment wehadalreadyinvestedEUR6 billion.Wearehappytoreportthat wehavealreadyreachedthetarget ofEUR10billionfarearlierthan anticipated.Wewillcontinuetoraise thebarandincreaseourinvestments insocialhousing,retirement homes,renewableenergyand infrastructure.Thestrongfocuswe putonsustainabilityisalsoreected inthesteadyimprovementinveoutofthesixESGratingsthatweactively engagein. At Ageas, we are making our ecological footprint smaller and our contribution to society bigger, year after year.Andin2021,weraised thebar:wewillchallengeandsupportthecompaniesweinvestinand stimulatethecustomerswhoenjoyourproducts,sothattogetherwecan makeanimpacttowardsamoresustainableworld. In this report you can discover a wealth of global and local initiatives that respond to changing customer and societal needs ranging from health to ageing, mobility and more. Message from the CEO & Chairman CEO Hans De Cuyper and Chairman Bart De Smet look back on the past year at Ageas and give a sneak preview of what is in the pipeline for the years to come. As an insurer, we have a commitment towards our stakeholders to maintain a sustainable business that is built to last. 10 Ageas Annual Report 2021 A robust performance showing our resilience Aswereectonour2021performance,wedosowithpridebothin termsofwhathasbeendeliveredbutalsoonhowitwasdone.Ourlocal achievementsareatruetestimonytohowAgeas’sstoryisbroughttolife acrosstheworld. TheGroupdeliveredstrongnancialresultswithanetresult excludingtheimpactofRPN(i)ofEUR945million,atthetop-endof our guidance, Solvency II-ratio (197%) above target and a dividend of EUR 2.75,correspondingtoapay-outratioof52%,inlinewiththe Connect21target.Ageasalsorecordedastrongcommercialperformance inbothEuropeandAsia,withamarkedgrowthininowsinUnit-Linkedand Non-Life. ThedevastatingoodsofthesummerinBelgiumandintheUKled toalevelofclaimsoverandaboveanythingweexperiencedbeforefroma singlenaturalevent,butthestrongresultsfromallourbusinesseshelped compensateforthis,demonstrating the resilience of our Group thanks toourgeographicalspreadandourdiversiedportfolioinLife,Non- LifeandReinsurance. Alongtheway,ourbusiness,especiallyLife,continuedtobechallenged by the low interest rate environmentwhichalsoimpactedtheChinese marketthisyear.But thanks to our ability to quickly align our asset management with the interest rate evolution and thanks also to the solidbalancesheetofTaipingLife,theresultsremainedstrongand resilient,underscoringthevalueofgrowthmarketsinAsia.Theacquisition ofastakeinTaipingReprovidedafurtherelementofdiversication,which hasapositiveimpactonourNon-LifeinowsinAsia. Weextendedourpartnershipinthefast-growingTurkishmarketwiththe acquisitionofAvivaSA.TheLifeInsurerandPrivatePensionProviderwas renamed ‘AgeSA’andisalreadycontributingpositivelyinitsrstyear toourLiferesultsinEurope. Withthisexcellentperformance,wefullydeliveredagainstallthe nancialtargetssetoutintheConnect21plan. Both our European and Asianentitiescontributedtothegrowthininowsandnetresultoverthe 3-yearperiod.Today,Asiacontributestoabout46%ofthegrossinows (Ageas’part)and38%oftheInsurancenetresult.Thisdemonstratesthe valueofourgrowthmarkets,supportedbyouruniquepartnershipmodel. LocalautonomyempowersouroperatingcompaniesandJointVenturesto beagileintheirlocalmarket. Oncemore,theGroup’sresiliencehasbeenkeyandourwell-diversied andwell-balancedbusinesshascontributedtothat.However,inaperiodof lockdownsandisolation,resilienceisalsodowntopeople.Theymakethe difference,andwehavethebest. MESSAGE FROM THE CEO AND CHAIRMAN At Ageas, we are making our ecological footprint smaller and our contribution to society bigger, year after year. And in 2021, we raised the bar: we will challenge and support the companies we invest in and stimulate the customers who enjoy our products, so that together we can make an impact towards a more sustainable world. Hans De Cuyper, CEO Ageas 11 Ageas Annual Report 2021 Bart De Smet, Chairman Hans De Cuyper, CEO The Group’s resilience has been key and our well-diversiﬁed and well-balanced business has contributed to that. But resilience is also down to people. They make the dierence, and we have the best. Bart De Smet, Chairman Ageas On the move for our people Weknowthatourownpeoplealsofeeltheimpactoftheeventswehave seenoverthepastyear,andwesupporttheminanywaywecan.Butwe wanttogofurtherthanthat.WewanttobeconsideredaGreatPlaceto Growbyour40,000employeesby,amongstothers,sparkingtrust-based collaboration,offeringlearningandcareeropportunitiestoprepareour workforceforthefuture,improvingthequalityofworkforouremployeesand theemployeejourney,andstimulatingdiversityandinclusion.Weareproud tohavereceivedTopEmployeraccreditationsinBelgiumandtheUKatthe startoftheyear,reectingourongoingeffortstobeaninspiringemployer acrossallourmarkets. Creatinganinspiringofceenvironmentthatfacilitateshybrid working and collaborationisanotherimportantsteptowardsachieving thisambition.WewillrelocateourheadquartersinBelgiumtotheManhattan buildinginBrussels,afullysustainableofce.Withintheheadquarters ofdaughtercompanyAGinBrussels,wehavedevelopedanewtraining campus,andourPortugueseteamsarerelocatingtonewofcebuildings inLisbonandPorto.Allofthesehavebeendesignedasstate-of-the-art andsustainableworkenvironments,whereouremployeescanconnectand co-create. The future is about making an Impact Connect21providesuswithastrongstartingpointforthecoming years.IndevelopingImpact24,wefocusonourstrategicchoicesand investmentsforthelongterm,notjustforthenextthreeyears.With thisplan,wewillstrengthenandgrowourcorebusinessbyunlockingthefull potentialthatweknowexists.Wewillpursuenewopportunitiesforgrowthto future-proofourbusiness.WewillprioritiseM&Aopportunitiesthatallowus tostrengthenourleadingpositionsinexistingmarkets.Andwewillensure thatsustainabilityisattheheartofeverythingwedo. Theimpactwemakeshouldcontinuewellbeyond2024.Theworldis transformingfasterthaneverbefore.Ourjobistoevolvewithit,andwewill. This is the perfect moment to thank our people and our partners for their contribution. Thank you also to our customers and investors for their loyalty to Ageas.Welookforwardtoasuccessfulyeartogetherand, inaworldthathasrecentlywitnessedsomuchdevastationinUkraine,we hopeforafuturethatseespeaceandstabilityreturnforhumanity. 12 Ageas Annual Report 2021 KEYFINANCIALSANDDEVELOPMENTS 24 February Ageas reports excellent Group results despite Covid-19 4 May Ageas acquires a 40% stake in AvivaSA in Turkey 20 April Moody’s conﬁrms rating upgrade to A1 with Stable Outlook 5 May Ageas completes sale of stake in Tesco Underwriting 1 June Ageas announces details of new strategic plan Impact24 AgeasreportedastrongandresilientInsuranceperformanceforthefull yearacrossbothLifeandNon-LifeallowingtheGrouptoproposeagross cashdividendofEUR2.65pershare. ThisEUR140millionacquisitionfurtherstrengthensAgeas’spositioninthe fast-growingTurkishmarket. Ageashasestablishedapresenceinthefast-growingLifemarketinTurkey throughournewpartnershipwiththelistedLifeinsuranceandpensions companyAvivaSAwhichhassincebeenrebrandedAgeSA.Ageasalready enjoysapresenceinNon-LifeinTurkeythroughAksigortasince2012. RatingupgradereectedperceivedimprovementsintheGroup’scredit proleandresiliencetocreditshocks. Moody’supgradedAgeasandAGInsurancetoA1.Resolutionoflegal legacyissues,improvementsinunderlyingearnings,strongcapitalisation andreductioninleveragewereallcited,aswellastheGroup’sabilityto maintainstrongearningsandcapitalthroughoutthecoronaviruscrisisin 2020. Ageasagreedthesaleofits50.1%interestinTescoUnderwritingLtd.to TescoBank.TheNon-LifeinsurancejointventurebetweenAgeasand TescoBankwasformedin2010tounderwriteTescoBank-brandedcarand homeinsurancepolicies.ThesaleallowsAgeasUKtofurtherfocusonits corebusiness. Impact24representsthenextchapterforAgeaswithaclearfocuson growth. AsConnect21nearedthenishline,Ageasannouncedanew3-year strategicplanfortheperiod2022-24makingchoicesforthelong-term. Impact24isalong-termsustainablegrowthstrategythatbuildsonthe Group’scorestrengthsandemerginggrowthopportunities,putting sustainabilityatthecentre. Key ﬁnancials and developments 2.1 Highlights of 2021 Another year, another set of challenges but also a number of remarkable achievements for the Ageas Group. Here are some of the key highlights of the year. 13 Ageas Annual Report 2021 25 June Fitch conﬁrms upgrade to AA- with Stable Outlook 20 July Ageas mourns the victims of ﬂoods in Belgium 1 September New role of Chief Development & Sustainability Oicer (CDSO) 23 November Ageas announces move to new sustainable oice 10 August Improved Sustainalytics score conﬁrms Ageas’s sustainability eorts 18 October Ageas launches a Chair in Sustainable Insurance 7 December Ageas celebrates 20 years of partnership with China Taiping Group UpgradereectsAgeas’ssustainedstrongnancialperformanceandcapital strength. FitchRatingsupgradedtheInsurerFinancialStrength(IFS)Ratingofageas SA/NV,AGInsuranceandAgeasInsuranceLimitedto‘AA-’.Theupgrade reectsthestrongnancialperformance,andverystrongcapitalisation, despiteadverseandvolatilemarketconditionscausedbythepandemic, alongsideastrongbusinessprole. Onthisdaywerememberedthevictimsoftheworstnaturaldisastertohit Belgiuminrecentdecades. Ouremployees,agents,brokers,andpartnersdideverythingwithintheir reachtocompensatecustomerswholosttheirhomesandpossessions asquicklyaspossible.Asleadinghomeinsurer,AGparticipatedin consultationswiththegovernmentandprovidednecessarysupport,data, andexpertiseinmanagingthecrisis. GilkeEeckhoudtnamedasnewCDSOtohelpdriveImpact24 implementation. OnbehalfoftheGroup,shewillleadalltransversalbusinessinitiatives withinBusinessDevelopment,TechnologyDevelopment&Sustainabilityin supportoftheimplementationofthenewstrategicplanImpact24.Gilkealso joinstheGroupManagementCommittee. AgeaswillmoveitsheadquarterstotheManhattanbuildinginBrussels reectingtheGroup’sambitiontobeaGreatplacetoGrowforits employees. Ageasiscreatingasustainableworkplaceinlinewithitsstrategytoput sustainabilityattheheartofeverythingitdoes.Andthetrendcontinues elsewhere,withnewbuildingsinPortugalandanewAGCampusin Brussels.Thesemovesdeliveraninspiringandsustainablephysicalwork environment,withsufcientroomtoconnectandcollaborate,supportedby adigitallysmartworkenvironment. ContinuedeffortstoimproveESGdisclosuresandtransparencyreectedin betterESGriskscore. AgeasisactivelyrespondingtosixoftheleadingESGratingagencieswitha steadyimprovementinESGscoresforeachofthemyearonyear.Assuch, Sustainalyticsimproveditsratingfromamediumriskscoreof28.7toalow- riskscoreof18.8bringingAgeasclosetoatopquartileperformancewithin theinsuranceindustryranking. IncollaborationwiththeUniversityofAntwerp,Ageascommitstoresearch programmefocusedonsustainableinsurance. Insurershavethetoolstomakeadifferenceinareassuchasnancial inclusionandsolidarity.Andtheycanencouragesustainablebehaviour throughresponsibleinvestmentsortheinsuranceproductsandservices theyoffer.ThisChairinSustainableInsuranceallowsAgeastobeatthe centreofthedebate. AgeasisproudtocelebrateitslongeststandingjointventurewithChina TaipingGroup:20yearsofsuccessfulcollaborationdemonstratingthat partnershipsarepartoftheAgeasDNA. AgeasalreadyrecognisedthegrowthpotentialinChinabackin2001. LeveragingtheuniquepositionofChinaTaipingGroupcombinedwiththe globalinsuranceexperienceofAgeas,TaipingLifeInsuranceistodayone oftheleadingandmostrespectedinsurersinChinawith19,000employees, 387,000agentsand1,400branchesandsaleofces.Itisalsooneof themosttrustedinsurancebrandsinthemarketplace,serving15million customers.Thisyearisalsothe20thyearofpartnershipwithMaybankin Malaysia. Read more about these events on our Annual report website. 54 52 50 48 46 44 42 40 38 12/31 2020 1/31 2021 2/28 2021 3/31 2021 4/30 2021 5/31 2021 6/30 2021 7/31 2021 8/31 2021 9/30 2021 10/31 2021 11/30 2021 12/31 2021 Evolution of Ageas's share price in 2021 (in EUR) 14 Ageas Annual Report 2021 Description Targets 2021 CombinedRatioNon-Life(%) <96% 95.4% LifeOperatingMarginGuaranteed(bps) 85-95 99 LifeOperatingMarginUnit-Linked(bps) 30-40 35 GroupSolvencyIIratio(%) 175% 197% Earnings/shareCAGR 5-7% 11% DividendPay-out(%) ≥50% 52% KEYFINANCIALSANDDEVELOPMENTS As we delivered on the targets set out in Connect21, we can look back with satisfaction on the past three years. Through Impact24 we want the power of the Group to come into play to help drive growth. Christophe Boizard, CFO Ageas LookbackathowAgeashasdeliveredaconsistently strong performance over the past 5 years against a range of key performance indicators. 43.58 45.55 15 Ageas Annual Report 2021 2.2 Key Figures 2021 2020 Net result Ageas 845 1,141 By segment: -Belgium 400 411 -UK 61 65 -ContinentalEurope 119 136 -Asia 403 269 -Reinsurance 87 79 -GeneralAccount&Elimination (225) 181 ofwhichRPN(I) (101) (61) By type: -Life 743 570 -Non-Life 328 391 -GeneralAccount&Elimination (225) 180 Weightedaveragenumberofordinaryshares(inmillion) 187 188 Earnings per share (in EUR) 4.52 6.07 Grossinows(incl.non-consolidatedpartnershipsat100%) 39,777 35,572 -ofwhichinowsfromnon-consolidatedpartnerships 29,022 26,107 GrossinowsAgeas'spart(incl.non-consolidatesentities) 16,134 14,535 By segment: -Belgium 5,006 4,575 -UK 1,406 1,525 -ContinentalEurope 2,341 1,873 -Asia 7,381 6,561 By type: -Life 11,225 9,978 -Non-Life 4,909 4,557 Combined ratio 95.4% 91.3% Operating margin Guaranteed (bps) 99 90 OperatingmarginUnit-Linked(bps) 35 29 2021 2020 Shareholders' equity 11,914 11,555 Net equity per share (in EUR) 64.14 61.80 Netequitypershare(inEUR)excludingunrealisedgains&losses 43.43 39.64 ReturnonEquity-AgeasGroup(excludingunrealisedgains) 10.9% 15.5% Group solvency II ageas 197% 193% LifeTechnicalLiabilities(consolidatedentities) 78,192 78,692 16 Ageas Annual Report 2021 2.3 2021 marked by strong results with net Insurance proﬁt exceeding EUR 1 billion and inﬂows close to EUR 40 billion Drivenbyastrongcommercialperformanceinmostregionsand particularlyinLife,inowsin2021increasedby12%toEUR40billion. ThesustainedoperatingmarginonGuaranteedproducts,theimproved marginonUnit-LinkedandtheNon-Lifecombinedratioreectthe excellentoperatingperformanceoftheconsolidatedentities,countering theheadwindsfromlowerinterestratesandexceptionalweatherevents. Combinedwiththestrongcontributionfromthenon-consolidatedentities, withAsiadeliveringanextraboostaboveexpectationsinthefourthquarter, thenetresultfortheinsuranceactivitiesexceedsEUR1billion.TheGroup netprotexcludingRPN(i)amountedtoEUR945million.2021wasalsothe nalyearofAgeas’sConnect21strategy.Inthislastyearofthestrategic cycletheGroupconrmeditssustainablestrongoperatingperformanceof previousyears,deliveringonallthenancialtargets. Group Theyear-to-dateGroupinowsincludingthenon-consolidated entities (at100%)increasedtoEUR40billion,or+12%comparedtolast year,evenlyspreadoverthematurebusinessinEuropeandthenon- controlledpartnershipsinAsia.Scope-on-scopetakingintoaccountthe divestmentoftheGroup’sstakeinTescoUnderwritingandtheacquisitions ofAgeSa(Turkey)andTaipingRe(China),Groupinowsincreased6%. AsiaLifeinowsweredrivenbyhighpersistencylevelsinChinaandthe inclusionofTaipingRe.InEurope,LifeinowgrowthwasdrivenbyUnit- LinkedsalesinBelgiumandinPortugal,wherethetransitiontowardsless capital-intensiveproductscontinues.Non-Lifeinowswereupmainlythanks toastrongcommercialperformanceinBelgium,andtheinclusionofTaiping Re.Non-LifeinowswerealsoupbothinPortugalandTurkey,withgrowth inthelatterhoweverfullyoffsetbytheimpactoftheTurkishLiraexchange rate. Astrongoperatingperformanceoftheinsuranceoperations,bothinLifeand Non-LiferesultedinanetInsuranceprotofEUR1,071million. TheGroup netprotamounted toEUR845millionwithanegativeresultoftheGeneral AccountofEUR225million,includingaEUR101millionnegativeimpact relatedtotheRPN(i)revaluation. TheNon-Lifecombined ratiooftheconsolidatedentitiesstoodat95.4% reectingastrongoperatingperformanceacrossallproductlinesand includingthechargesagainsttheoodsinBelgiumandtheUK.Thecost relatedtoadverseweathereventsfortheGroup,includingthechargesof theJulyoodsinBelgiumandtheUKamountedtoEUR160million.In Motor,theclaimsfrequencygraduallyreturnedtopre-Covidlevelsduring thefourthquarterasrestrictionsonmobilityhavebeenliftedacrossEurope. TheLifeGuaranteedoperatingmarginreached99bps,largelyexceeding the85-95bpstarget,thankstoasolidinvestmentresultandtherealisation ofnetcapitalgains.RealestaterevenuesinBelgiumaregradually recoveringfromtheimpactofCovid-19.TheGroupUnit-Linkedoperating marginstoodat35bpsattheendofDecember,wellwithinthetarget rangethankstoasatisfactorymargininBelgiumandastrongrecoveryin ContinentalEurope,drivenbyincreasedvolumes. Ageas’s Solvency II ageas ratioamountedto197%comparedto193%end 2020.Theincreasewasdrivenbythestrongoperatingperformanceof theinsuranceoperations,morethancoveringtheaccrualoftheexpected dividend,andwasfurthersupportedbymodelchanges.Theoperational freecapitalgenerationover2021amountedtoEUR629million(excluding theoodscontributioninBelgiumabovethelegalcap),Thefreecapital generationbenettedfromastrongEUR185millioncontributionin dividendsfromthenon-controlledparticipations. Thetotalliquid assetsamountedtoEUR1.1billion.Theupstreamedcash fromtheoperatingcompaniesamountingtoEUR725millionover2021 morethancoveredtheholdingcosts,theEUR485milliondividendpaid toAgeas’sshareholdersandtheEUR55millioncash-outrelatedtothe ongoingsharebuy-backrealisedin2021.Theacquisitionofa40%stakein theTurkishLifecompanyAgeSaresultedinacash-outofEUR140million whereasthesaleofTescocontributedEUR143million. KEYFINANCIALSANDDEVELOPMENTS 17 Ageas Annual Report 2021 As we reﬂect on 2021, we can be proud of the stronger than market growth in all business segments despite the challenges we faced. It goes without saying that the continuing impact of Covid and the devastating summer ﬂoods which caused so much human suering for so many, will stay in our memories for a long time. Heidi Delobelle, CEO AG By business segment BELGIUM ThenetresultamountedtoEUR400millioncomparedtoEUR411 millionin2020.In2021,inowsrecordedaremarkablegrowthinbothLife andNon-Life.LifeinowsgrewstronglythankstoexcellentgrowthinUnit- Linked(+52%YoY)supportedbycommercialcampaignsintheBrokerand Bankchannels.Non-Lifeinowsachievedexceptionalgrowthof9%versus 2020withanincreaseinallbusinesslinesthankstothejointeffortsofAG anditsdistributionpartners. TheLifeGuaranteedoperatingmarginreached97bpsthankstoasolid investmentresultandimprovedunderwritingmargin,whilelastyearwas impactedbythevolatilityofthenancialmarkets.Duringthefourthquarter theguaranteedmarginbenettedfromcapitalgainsmainlyonrealestate. TheUnit-Linkedoperatingmarginwasstrongat37bps. TheNon-Lifecombinedratiosufferedfromanexceptionallyhighimpact fromthesummeroodswitha10%impactpartiallyoffsetbyclaimsreserve adjustmentsinP&Cinthefourthquarter.Excludingtheseexceptionalitems, thecombinedratioreectedastrongunderlyingperformanceacrossall businesslines. UK ThenetresultamountedtoEUR61millioncomparedtoEUR65million in2020. Year-to-dateinowsscopeonscope,takingintoaccountthedivestment ofTescoUnderwriting,wereslightlyuptoEUR1.4billion.Continued growthinHouseholdcompensatedforlowerMotorpremiumsasaresult ofadisciplinedapproachtopricinginamarketwithcontinuedlowaverage premiums. TheNon-Lifecombinedratiostoodat96.2%.Thisreectsastrong operatingperformancethatmorethancompensatedforthechargesofthe adverseweathereventsimpactingboththeHouseholdandOtherlines’ combinedratio,andsomereservestrengtheningagainstfutureclaimscosts. Theincreaseinclaimscostsyearonyearreectsthegradualriseinvehicle usageafterthepandemicrestrictions. 2021 has been a strong year for Ageas UK. We brought greater focus to our business, going for growth in our chosen markets. We prioritised personal lines, broadening our relationships with brokers and aggregators, and adding more than 200,000 additional customers in the process. Ant Middle, CEOUK 18 Ageas Annual Report 2021 In 2021 Ageas in Portugal took important steps towards creating an even more customer-centric organisation, constructing at the same time the perfect platform for the launch of the new strategic plan Impact24. We delivered a strong business performance with sales growing faster than the market average. And the Ageas brand continued to improve, distinguished in the sector by its reputation for being innovative, creative, and energetic in approach. Steven Braekeveldt, CEOPortugal CONTINENTALEUROPE ThenetresultofContinentalEurope,comprisingbesidesPortugalalso theactivitiesinFranceandTurkey,amountedtoEUR119millioncompared toEUR136millionin2020. AgeasrecordedanexcellentcommercialperformanceinContinental Europe,withinowsupinbothLifeandNon-Life.InLife,year-to-dateinow jumped53%scope-on-scopetoEUR3.5billion(excludingthecontribution fromAgeSAinTurkey,acquiredinMay2021),drivenbystrongsalesof Unit-Linkedproducts.Additionally,theoff-balancesheetexiblepension productsinPortugalcontinuedtogrowandgeneratedEUR207million inows.Non-Lifeinowsgrew18%atconstantexchangerate,drivenby salesmomentuminAccidentandHealth. Theguaranteedoperatingmarginamountedtoastrong108bps,supported byasolidunderwritingperformance.TheUnit-Linkedmargincontinued itssteadyincreasefollowingthechangeinproductmixandthegrowthin inows. Thecombinedratioovertheyearstoodatasolid88%,withclaims frequencybacktopre-Covidlevelsasfromthesecondquarter. TheLiferesultwassignicantlyup,whenexcludingtheEUR20million positivecontributionfromthereservereleaseinPortugalin2020.It benettedfromagoodunderwritingperformanceinPortugal,further supportedbytheAgeSAcontribution(EUR11million)inTurkeysince May2021.TheNon-Liferesultreectedthenormalisationoftheclaims frequencyinMotoraswellasincreasedclaimscostsinHealthinsurancein Portugal.ThecontributiontonetprotofAksigortainTurkeywasnegatively impactedbyhighinationandadverseclaimsexperience. ASIA ThenetresultamountedtoEUR403millioncomparedtoEUR269 millionin2020. InowsinAsiaincreasedby8%atconstantexchangeratesovertheyear toEUR28.2billion(inowsat100%).TheorganicgrowthrecordedinLife andNon-LifewasfurthersupportedbythecontributionfromTaipingRe.Life Technicalliabilitieswereup18%atconstantexchangerates,supportedby newbusinessgrowthandhighpersistencylevels.InChina,thegrowthwas drivenbynewbusinessinhighvalueregularproductsandastrongyearend campaign.InNon-Life,inowsbenettedfromtheTaipingRecontribution, while,scope-on-scope,inowswereup4%,drivenbyMalaysia. WithanetresultofEUR403million,supportedbyasolidunderlying performance,AsiastronglycontributedtotheoverallGroupnetresult. TheLiferesultbenettedfromasoundoperatingperformanceinChina, MalaysiaandThailand,whilethecontinuedunfavourableevolutionofthe discountrateinChinawasmitigatedbyhighernetrealisedcapitalgainsand alowereffectivetaxrate.InNon-Life,allentitiescontributedpositivelytothe full-yearresult. In 2021 we increased our focus on the customer journey, exploring ways to optimise the experience. In China, Vietnam and the Philippines we deployed technology and servicing platforms to help create the best process and culture for customer engagement, leveraging voice collection and data analysis initiatives. Gary Crist, CEO Asia KEYFINANCIALSANDDEVELOPMENTS 19 Ageas Annual Report 2021 The Ageas reinsurance story has been evolving since 2015 when the Group ﬁrst established an internal reinsurance capability through Intreas. From a small satellite internal activity, reinsurance has grown into a signiﬁcant segment, delivering business and capital synergies to protect and strengthen the core business. Antonio Cano, MD Europe (including responsibility for Reinsurance) REINSURANCE ThenetresultamountedtoEUR87millioncomparedtoEUR79million in2020.Thereinsurance inowsincludedEUR1.4billionfromthequota shareagreementswhileaninternalLifeReinsurancecontractsetupwith AgeasFranceatthebeginningof2021generatedEUR29millioninows. Includingthetraditionalprotectionbusiness,totalinowsareinlinewith 2020levelsandamountedtoEUR1.6billion. In2021,theReinsuranceresultincreased10%thankstostrongfourth quarterresultsbenettingfromareservereviewrelatedtotheUKMotor contractandclaimsprovisionadjustmentsinBelgium.Thefullyearresult benettedfromaslightlylowercurrentyearclaimsfrequencyinMotor recordedatthecedingentities,albeittoamuchlesserextentthanover 2020,partiallymitigatingtheimpactofadverseweathermainlyinBelgium andtoalesserextentintheUK. 2.4 Events after the date of the Consolidated statement of ﬁnancial position On15February2022,AgeasannouncedthatitssubsidiaryAgeasUK LtdhadconcludedanagreementwithAXAInsuranceUKPLCtosellits Commerciallinesfrontbookbusiness,attheleveloftheAgeasGroupthe transactionwillhaveaninitialimpactofEUR45.5milliononthenetresults, whichwillberecordedinthersthalfof2022. AgeasiscarefullymonitoringthedevelopingsituationinUkraineand Russia,inparticularwithregardstoindirectmacro-economiceffectssuch asthefutureevolutionofinterestratesandinationinmarketswherewe areactive.TheGroupisnotactiveineithercountrythroughsubsidiaries orafliates.Foreseeabledirectimpactsarejudgedtobeimmaterial, consideringtheinsignicantdirectexposuretheGrouphastothese markets. SeealsonoteF.44. 2.5 Statutory results of ageas SA/ NV under Belgian Accounting Principles ForamoredetailedexplanationonthestatutorynetresultofageasSA/ NVandotherBelgianregulatoryrequirementsinaccordancewitharticle 3:6oftheBelgianCodeofCompaniesandAssociations,pleaserefertothe FinancialStatementsofageasSA/NV. AgeasSA/NVreportedforthenancialyear2021basedonBelgian AccountingPrinciplesapositivenetresultofEUR505million(2020:EUR 672million)andashareholders’equityofEUR5,570million(2020:EUR 5,687million).PwChasissuedanunqualiedauditor’sreportontheageas SA/NVCompanyFinancialStatements. OurlocalandregionalCEO’ssharedtheirtakeonthechallengesandopportunitiestheyexperiencedacrossBelgium,ContinentalEurope,theUKand Asia. Read the full interviews here. 20 Ageas Annual Report 2021 2021wastheclosingyearoftheConnect21strategy.Ageas successfullydeliveredonallnancialtargetsandmadesubstantial progressinimplementingitsstrategicchoices.Engagingstronglywithall stakeholdersAgeastrulyliveduptoitspurposeasa“Supporterofyourlife”. InJune2021,thenew3-yearstrategyfortheperiod2022-24waslaunched. Impact24isalong-termsustainableGrowthstrategyfortheGroupandfor itspeople,buildingonthefoundationsofConnect21. TheConnect21headlinesthatdrovethestrategyoverthepast3years remainveryrelevantunderImpact24. Supporter of your life Asa“Supporterofyourlife”theGroupseekstocreatevaluefor customers,employees,partners,investorsandsocietyatlarge.Foreach ofthesestakeholdergroupsAgeasmadespecicpledgesanddened correspondingkeyperformanceindicators(KPIs). Impact24steersAgeastowardslong-termsustainable growth Overthepastdecade,Ageasgraduallyevolvedintoaprotable insurancecompanyconstantlylookingforwaystodevelop,withthe customertakingcentrestage.WhendesigningitsstrategicplanConnect21 in2018,Ageaswentbacktobasics,exploringtheveryessenceofits existence.Itrecognisedthattheworldisbecomingmorecomplex,meaning thattheroleofaninsurerisconstantlybeingchallengedandexpandedto meetthechangingneedsofallstakeholders. Foritscustomers,Ageasaimstotakecareofthe“whatif’s”andthe“what’s possible”sotheycanlivetheirlifetothefullestwithpeaceofmindatevery stageoftheirjourney.Throughitscompetencesandskills,Ageasoffers solutionsinthedomainsofhealth,well-being,housingandmobilityaswell asinmattersrelatedtoageing,includingsavingsandpensionsolutions. Ageasembracesthelatesttechnologicalevolutionstocreateagreat customerexperience,offeringsolutionsbeyondthetraditionalboundariesof insurance:toprevent,prepare,protectandassist. InexploringthesenewareasbeyondtraditionalinsuranceAgeasalso recognisesitsbroaderroleinsociety,takingnoteofthosesocietal challengeswhereAgeascanaddmostvalue.Inthiscontext,underwriting theUNPrinciplesofResponsibleInvestment(PRI)foritsinvestments,the UNEPFIPrinciplesofSustainableInsurance(PSI),UNGlobalCompact (GC)principlesandembracingaselectionofrelevantUnitedNations SustainableDevelopmentGoals(SDG)helpssupporttheseefforts. Impact24,designedduringthecourseof2021isanaturalevolutionfrom Connect21.Ageaslikestobeconsistent.Stayedtruetothefourvalues: Care,Dare,DeliverandShare.Ageashasalreadyshownthatitcandeliver againstitschoices,itsvalues,andnancialtargets.Infact,itisthesuccess ofchoicesmadeinthepastthatprovidesitwithananchorandastrong platformforfuturegrowth. TheImpact24planisgroundedintheAgeas’sDNAandwhatworkswell today.Theplanalsoprovidesexibilitytoinvestinfuturetrendslikelyto impacttheworldnotonlyby2024butevenby2030andbeyond.Impact24 wastheresultofanintensecollaborationofmorethan100Ageas professionalsfromacrosstheGroupleveragingtheexpertiseofagoodmix oflocalandcorporatebasedcolleagues.TheGroup’sinternallydeveloped HorizonScan,usinghumanandarticialintelligence,allowsAgeasto continuouslymonitorthemostsignicantemergingtrends.Coupledwiththe sustainabilitymaterialityassessment,thisservedasthebackboneofthe plan.Eachoftheeightstrategicchoicesisinterrelated,andaccountability isensuredthroughclearKPIsandtargets,allowingAgeasandits stakeholderstotracktheGroup’sprogressinahighlydisciplinedway.The newnon-nancialandsustainabilitytargetsstrengthenourcommitmentto createbotheconomicandsocietalvalue.It’sallaboutmakinganimpact, aboutdoingthingsintherightwayandit’salsowhysustainabilitysitsat theheartofeverythingAgeasdoes.Ageasrecognisesithasadutyofcare andresponsibilitytofuturegenerations.Thisplanisdesignedtodelivertop performanceforallstakeholders,asseeninthisvisual: Strategy and business model of Ageas STRATEGYANDBUSINESSMODELOFAGEAS Discover more about Ageas’s approach to long-term thinking and trend tracking. 21 Ageas Annual Report 2021 ImplementingConnect21andnowImpact24isagradualprocessinaworld thatisconstantlychanging.Thenewstrategicplanreectsevolutionsina regulatorycontextaswellasfastchangingstakeholders’expectations.It buildsonthefoundationsandrealisationsofConnect21withnoimmediate changetothebusinessmodel.Ageasacknowledgesthatthismeans constantlyevolvingandreinventingitselftoretainitscompetitiveedgeover time. CARE DARE DELIVER SHARE Top performance in balance for ALL Customers and People ﬁrst Strengthen & Grow the Core Pursue new opportunities for Growth in Health, Protection, Digital platforms & Reinsurance Partnering with Current & Future winners Reinforcing Tech & Data capabilities Local model with Group beneﬁts Leadership positions in Europe & Asia Sustainability and Long-term thinking at the heart of everything Find out more about Ageas’s new strategic plan onourdedicatedImpact24website. 22 Ageas Annual Report 2021 Ageas’s business model TheschemebelowpresentsAgeas’sbusinessmodeland reectsthechoicesmadeinImpact24. STRATEGYANDBUSINESSMODELOFAGEAS 23 Ageas Annual Report 2021 Startingfromitspurposeandasetofcorevalues-care,dare,deliver andshare-Ageas,presentin14countriesacrossEuropeandAsia,offers LifeandNon-LifesolutionstomillionsofRetailandBusinesscustomers. Throughitscommitmenttoprevent,prepare,protect,andassistAgeashelps customerstoanticipate,manageandcovertheirrisksthrougharangeof productsdesignedfortheirneedstodayandinthefuture. Distinguishedbyitsexpertiseinpartnerships,Ageashasdeveloped long-termagreementswithmarket-leadinglocalnancialinstitutionsand distributorsaroundtheworldallowingittostayclosetothecustomer.Inthe future,Ageaswillcontinuetostrengthenandgrowthosepartnershipsand ecosystemsthatprovidemutualbenet. Bydevelopingproductsandservicesbeyondinsurance,thecompanyaims torespondtonewneedsandprioritiesinaworldchangingataspeednever experiencedbefore. Asisthecaseforothercompanies,Ageasoperatesinadynamiclegislative andregulatorycontext,takingintoaccountSolvencyIIandMid,and,more recentlytheupdatedIFRSregulation,GDPRdataprotectionregulation, EUtaxonomyandSFDR.Italsorelatestoregulationorquasi-regulatory frameworkssuchasthePRI,PSI,UNGCandUNSDG’sandprinciples aroundclimatechangesuchastheTaskforceforClimaterelatedFinancial Disclosures(TCFD)guidelines.Andthereismoretocome,forexamplethe EUWhistleblowingdirectivethatisexpectedtocomeintoforcein2022and theCorporateSustainabilityReportingDirective(CSRD)probablyasofthe accountingyear2023. Finally,itgoeswithoutsayingthatAgeascanonlydeliveronitspromises withthesupportofappropriatelyskilledandcommittedemployeesand capitalprovidedbyshareholders. Ageas’sbusinessmodelgeneratesseveraltypesofincomestreams: • Underwriting:theresultfromthecollectedinsurancepolicypremiums minusclaimsandrelatedexpenses.Theessenceofinsuranceisthe poolingormutualisationoftheriskofinsuredindividualsorcorporates broughttogetherintoalargerportfolioofinsuredassets.Thecustomer payssingleorregularpremiumstocoverrisksrelatedtoLife,Home, Car,TravelormorespecictypeofriskswhichAgeasinsuresandpays outclaimsincaseofanadverseevent.Goingforward,feeincomemay comefromothersourcesdependingtowhatextentAgeasmanagesto developitsservicesbeyondinsurance. • Underwriting/reinsurance:Ageasdecidedin2015tosetupaninternal reinsuranceactivitywhichallowsittopoolgroupreinsuranceprotection, retainapartoftheriskcoverageforitsownaccountandmanagethe diversicationbenetsintrinsictoitssolvencyframework.In2020, ageasSA/NValsostartedtoparticipateinexistingLifereinsurance programmesofitsgroupcompanieswiththeambitiontofurtherdevelop thereinsuranceexpertiseandexposure. • Investments:thenetnancialresultgeneratedviatheinvestmentof premiumsintootherrevenuegeneratingassets,suchasgovernmentor corporatebonds,loans,equitiesorrealestate.Byinvestinginawide anddiversiedsetofassetsspreadovermanyindustries,Ageasalso activelysupportstheeconomyandsocietywhilegeneratinganancial returnthatbenetsrstofallitspolicyholdersandinasecondstepows backtoitsshareholdersordebtholders. Withitsgroup-widepurposeandvalues,anditsclearstrategicchoices andbusinessmodel,Ageasaimstobeatrue“Supporterofyourlife”and tocreatevalueforallitsstakeholders:customers,employees,partners, investorsandsociety.ThesetofKPIsinImpact24hasbeenbroadened comparedtoConnect21withrsttimenon-nancialKPIs.Theyreect theprioritiessetbyAgeasinfourdistinctso-calledimpactareas:People, Products,InvestmentsandPlanet. Thisannualreportaimstoprovidethereaderwithalltherelevant informationneededtoappreciateAgeas’seffortstomeetthenancialand non-nancialexpectationsofallitsstakeholders. 24 Ageas Annual Report 2021 4.1 Embedding sustainability in our business Asaninsurancegroup,Ageasisattheheartofanumberofsocietal themeswhichareverymuchpresentinallourlives.Anageingpopulation, healthrelatedmatters,newformsofliving,mobilityandclimatechange,all createrisksandopportunitiesforAgeas'sbusinesses. AtthecloseofConnect21itistimetoreectonwhatthisplanrepresentedand howthiscametolifeoverthepastthreeyears:Connect21integratedforthe rsttimeexplicitly,society,asthefthstakeholdertobecomeastakeholder drivencompany,aimedatcreatingvalueforallitsstakeholderswhilsttaking intoaccountthespecicitiesofthevariouscountries. AndAgeasmadeacommitmenttoadheretotheUNSustainableDevelopment Goals(SDG).BasedonAgeas’scorecompetencesitchosetoactivelywork aroundthefollowingtenSDGs: Sustainability at the heart of everything we do The visual symbolises Ageas’s stakeholder engagement and a clear commitment on who the company wants to be as a Group, a true “Supporter of your life”. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO Signicanceofthereportingorganization’seconomic, environmental and social impacts Inuenceonstakeholder assessments and decisions MATERIALITYMATRIXAGEASGROUP HIGHLYMATERIALTOPICS 9 Financialresilience 7 Responsiblegovernance MATERIALTOPICS 11 Insuranceproductsandservicesprotectingagainstsocietalchallenges 14 Socialresponsibleinvestmentsfocusingonsocietalchallenges 12 Easytounderstand,fairandtransparentinformationtocustomers 2 Healthandwell-beingofouremployees 3 Personalandprofessionaldevelopmentofouremployees 10 Insuranceproductsandservicesincentivisingresponsiblebehaviour MODERATELYMATERIALTOPICS 1 Environmentalfootprintofourbusinessoperations 4 Equalopportunitiesofouremployees 6 Employeesandcustomers’dataprotection 13 Financialinclusionofcustomers(accessibilityofprotection) 8 Localcommunityengagement 5 Publicdebateparticipationonsocietalchallenges. 25 Ageas Annual Report 2021 Ageasisonasustainabilityjourneybuiltonitsstrongfoundations,starting fromitsDNA.Lookingbackonthelastthreeyearsthereareanumberof achievementsthatstandout: • Theformalengagementwithstakeholderstogainaclearerviewonwhat theyconsiderthemainprioritiesforthenext3to5years(materiality assessment); • Increasingtransparencytotheoutsideworldonhowsustainabilitylives withintheAgeasgroup,andformallyembeddingprocessesinternally, strengtheningknowledgeonopportunitiesitcanbringandadaptingthe governancemodeltoreecttheexplicitambitionsunderImpact24;and • SupportingthedevelopmentofImpact24,thenewstrategicplan,withfor thersttimeinAgeas’shistoryformalsustainabilitytargets. Ageas’smaterialityassessmentreconrmedbylocal materiality assessments Togaindetailedinsightintothesustainabilitytopicsthataremostrelevant forthebusiness,Ageasperformeditsrstmaterialityassessmentin2020 applyingadoublematerialityapproachwhenselectingthelistoftopics stakeholdershadtoassessontheirimportancetothefutureoftheAgeas group(LearnmoreabouthowAgeaswentaboutthisinthe2020Annual Report).TheoutcomeofthisrstESGmaterialityassessmentispresentedin thefollowingmaterialitygraph: BuildingontheinsightsfromthegroupmaterialityassessmentAgeas PortugalandAGinBelgiumconductedtheirownmaterialityanalysis focusedonthelocaloperations.AGextendedthescopeofitsengagement tocustomers,bothretailandcorporateclients,bymorethan2,000 respondents,astakeholdergroupthatwasindirectlycoveredinthegroup assessment.Theoutcomeforbothwasinlinewiththegroupoutcome,with sometopicshavingaslightlyhigherorlowerpositiononthemateriality matrix.Aswellasthelistofmaterialtopicsatgrouplevel,eachsubsidiary identiedothertopicsofsignicancetothelocalstakeholders.InPortugal, theseconcerned“sustainableandefcientprocesses”and“investment inthecommunity”andalthoughthescoreof“sustainableprocurement andpartners”wasnotamongstthehighest,AGconsidersitasanareato developgiventhepotentialimpact. 26 Ageas Annual Report 2021 Sustainability,anewstrategicchoiceinImpact24 Inspiredbytheresultsofthematerialityassessmentresultsandthe outcomeoftheHorizonScan,theGroup’snew3-yearstrategicplanwas built,Impact24.Thissetsoutthestrategicdirectionfortheyears2022-24 andputssustainabilityattheheartofthebusiness.Clearambitionsand targetshavebeendenedandthisplanactsasaguidetotheentiregroupin thecomingyearstoensurethatmanagingthecompanyinasustainableway isfullyembedded,bringingtheDNAofthecompanytolife. Thesustainabilityambitionshavebeenclusteredaroundfourimpactareas, i.e.:OurPeople,Products,Investments&Planet. Our ambitions are that: • Wewillworktowardsadiverseworkforceensuringfairandequal treatmentofouremployees,whilefosteringacultureofcontinuous learningandtakingcareofthehealthandwellbeingofourpeople. • Wewilloffertransparentproductsandservicesthatcreateeconomicand societalvalue,stimulatingourcustomersinthetransitiontowardsamore sustainableandinclusiveworld. • Wewillstrengthenthelong-term,responsibleapproachtohowweinvest, contributingtosolutionsaroundsustainablecities,localeconomies,and climatechange. • AcrosstheGroup,wewillreduceourenvironmentalimpact,aimingtobe ‘GHG-neutral’inourownoperations. Governance of sustainability SinceConnect21,formalsustainabilitygovernancehasbeenputin placewiththeGroupSustainabilityteamreportingdirectlytotheCEOof Ageas,underscoringthecommitmentandtheimportancegivenbythe companytoESG.Regularpresentationsandupdateshavebeenprovided totheExecutiveCommitteeandManagementCommitteeaswellastothe Board,bothontheoverallprogressaswellasonmoretechnicalaspects toenableandstimulatetheaccumulationofexpertiseuptothehighest leveloftheorganisation.Asanexample,aspecicdeep-divesessionwas organisedwiththeBoardinordertoestablishanurgencymatrixcombining thematuritylevelandthematerialtopicsastheycameoutofthemateriality survey. WithintheBoard,thefoursubcommitteeseachtakeupaspecicrole relatedtosustainability.TheNominationandCorporateGovernance Committeemakesrecommendationsonenvironmentalandsocietalmatters alongsidegovernancemattersandnon-nancialKPIs;theRemuneration Committeeadvisesonhowtoincludesustainabilityintheperformance KPIs(formoreinformationseenoteA5.7ReportoftheRemuneration Committee);theRiskandCapitalCommitteefollows-upondeningand monitoringESGrisks(seenoteC4RiskManagement),andnallythe AuditCommitteehasresponsibilityforassessing,reviewingandapproving theAnnualFinancialStatementsincludingthenon-nancialinformation disclosures. ThecentralGroupSustainabilitydepartmenthasapivotalroleindening andimplementingthesustainabilitystrategyinconjunctionwithstronglocal, decentralisedinvolvementdeliveredthroughanetworkofambassadors. Theseambassadorsrepresentthevariousbusinesses,mainsubsidiaries, andthemostrelevantcentraldepartments.Asidefromthecommercial businessesrepresented,i.e.,Belgium,UK,Portugal,andtheAsianregional headquarterscoveringalltheAsiancountries,thenetworkincludes ambassadorswithinthedomainsofRisk,HR,Communications,and Investments.Thisteamhasoverthepastfewyearsdriventhevarious initiativestakenacrosstheorganisation.InadditiontotheSustainability network,colleaguesfromotherdepartmentsinvolvedsuchasLegal, ComplianceandFinancerepresentativesalsointervenedonamoreadhoc basistointroducespeciccompetenceswhichcontributedtoevenbetter andmorebalancedsolutionsandtoensureasmoothandfastintegration oftherelevantsustainabilityprinciplesinthedailyprocesses.Thismodel hasproventobeverysuccessfulleadingtoarstwaveofsignicant achievementsandprogress. ToimplementtheImpact24strategyanewdepartmenthasbeencreated undertheCDSO,ChiefDevelopmentandSustainabilityOfcer,leading alltransversalinitiativesacrosstheGroup.TheCDSOhasaseatonthe Ageas’sManagementCommittee.GroupSustainabilityispartofthis neworganisationtoensuresustainabilityisfullyembeddedwithinall processesandespeciallywithinthenewproductdevelopment.Inaddition, aSteeringCommitteechairedbytheGroupCEOtakescareofanystrategic discussionsthatmayariseinthecourseofimplementationthatshould furthercontributetoasmoothESGtransition.Theneworganisationwas launchedasatSeptember1,2021,andhasbeenfullyoperationalsincethe beginningof2022. More information on the nine sustainability targets and the whole plan isavailableontheImpact24website.Asfromtheannualreportover 2022, progress against those targets will be reported upon. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO Our People, Products, Investments & Planet 27 Ageas Annual Report 2021 Scopeandset-upofthenon-nancialinformation disclosure note DisclosuresareinaccordancewiththeEUdirectiveonnon- nancialinformation,nationalESGrelatedlegislationandregulatory recommendationssuchastheEuronextguidanceonESGreportingissued inJanuary2020.Theyelaborateontheprogressmadebythestakeholder grouplinkedtotheoutcomeoftheESGmaterialitysurveyconductedin 2020buttheyarealsoconsistentwiththepledgesagreeduponwithin Connect21.Given2021isthelastyearoftheConnect21strategy,theset-up ofreportingissimilartolastyears.Impact24ambitionswillbereectedon inthenextyear’sannualreport.TheselectionoftheKPIsisbenchmarked withongoinginitiativesandstandardssuchtheWorldEconomicForum’s Towardscommonmetricsandconsistentreportingofsustainablevalue creationandSASBinsurancesectorstandard;thesebenchmarksserve asanadditionalsourceofinspirationforfurtherKPIdevelopment.Where possibleandappropriate,Ageasalsoprovidesinadditiontoqualitative informationanumberofquantitativenon-nancialindicators. Forthesecondtime,theinformationanddataintheAnnualReportis preparedinaccordancewiththeGRIStandards:Coreoption.TheGRI Standardsrepresentglobalbestpracticeforreportingpubliclyonarangeof economic,environmentalandsocialimpacts.Sustainabilityreportingbased ontheStandardsprovidesinformationaboutanorganisation’spositiveor negativecontributionstosustainabledevelopment.TheGRIcontentindex (seesectionH)showsagainstwhichindicatorsAgeasreports,andwhere tondtherespectiveinformation.Similartolastyear,theprinciplesof integratedreportingwereappliedwhereverpossible.2021ismarkedasthe rstyearofreportingunderEUtaxonomy,morespecicallyonthetaxonomy eligibleactivitiesandinvestments.Thisinformationhasbeenreportedina dedicatednote4.6onEUTaxonomy. AgeasisasignatorytoUnitedNationGlobalCompactandunderwritingthe PrinciplesofSustainableInsurance.Thereportsover2021areincluded intheformofreferenceindicesinthisannualreportinsectionHOther InformationUNGCProgressReportIndexandsectionHOtherinformation PSIIndex.Sincethestartof2022,Ageashasconrmeditscommitment toadaptandimplementtheStakeholderCapitalismMetricsoftheWorld EconomicForum.ReportingcanbefoundontheAgeassustainability reportingwebsiteaswellasthesecondTCFDreport (https://sustainability.ageas.com/reporting). MoreinformationonAgeas'sstrategyandbusinessmodelcanbefound inA.3ofthisreport;ESGrisksareaddressedinthesectionC.4Risk Management. ThepresentreportcoverstheentireAgeasGroupandmatchesthescope ofconsolidationusedfornancialinformationintheconsolidatedannual report,unlessotherwisestated. Refer to the reporting page on Ageas’s sustainability website for up to dateinformationonoureffortstomeetthenancialandnon-nancial expectationsofourstakeholders. 28 Ageas Annual Report 2021 4.2 Our customers and partners Material topics covered in relation to the customers • Insuranceproductsandservicesprotectingagainstsocietalchallenges • Easytounderstand,fairandtransparentinformationtocustomers • Insuranceproductsandservicesincentivisingresponsiblebehaviour Ourworldisgoingthroughaprofoundchangewithincreasingsocietal challengesfurtherexacerbatedbythehealthcrisis.Asaglobalinsurer, Ageasplaysaroleinprotectingitscustomersagainstadverseeventssothat peoplecancontinuetolive,saveandinvestwithpeaceofmind.Butasa supporterofyourlife,Ageaswantstogobeyondthisprimarydutyandmake surepeoplecanlivetheirlifetothefullest.WithinImpact24,Ageasisraising thebar,supportingitscustomersinthetransitiontoamoresustainable worldleveragingbestpracticesthatalreadyexistedin2021asastepping- stoneforthisnewstrategyforthecoming3years. WithinConnect21,thefocushasbeenwidenedtoactivitiesintheareaof preventionandassistancehelpingthecustomerstoanticipatepotential risksontopofregularprotectionandassistanceincaseofanadverse event.ThisextendedambitionallowsAgeastooffersolutionstoits customersthatcreateeconomicandsocietalvalueresultinginnewtypesof partnershipsbeyondourtraditionalalliances.Allthesecommitmentshave beenformalisedintoclearpledgesAgeasmadetowardsitscustomersand partnersandwhichhavebeenconrmedinthenewImpact24strategy. Thepledgeswemadetowardsourcustomersarethefollowing: • Wehelpcustomerstoprotectwhattheyhaveandtomakepossiblewhat theyaspire. • Weengagewithourcustomersforthelongterm. • Weprovideagreatcustomerexperience. • Weofferapersonalisedapproachunderpinnedbyclearandopen communication. Thecommitmentsmadetowardscustomersarestronglylinkedtothe company’sstrongtieswithpartnersasmanyofourcustomersareservedby thosepartners.Ourpledgestowardspartnersarethefollowing: • Weinvestinlongtermpartnershipsoralliances. • Wegiveourtrusttopartnerswhoshareourvaluesandambitions • Weconstantlyseektoevolveandimprovepartnershipstothebenetof allparties. • Welookforopportunitiesthatallowustosucceedtogether. GroupwideAgeasservesnearly45millioncustomersdirectlyorindirectlyin 14countriesacrossEuropeandAsiathroughacombinationofwhollyowned subsidiariesandlong-termpartnershipswithstrongnancialinstitutions andkeydistributors.AgeasoffersRetailandBusinesscustomersLifeand Non-Lifeinsuranceproductsdesignedtosuittheirspecicneeds,todayand tomorrow. Ageaswantstodeliverontheexpectationsbroughtforwardbystakeholders inthematerialityassessment:“Insuranceproductsandservicesprotecting againstsocietalchallenges;easytounderstand,fairandtransparent informationtocustomersandinsuranceproductsandservicesincentivising responsiblebehaviour”wereconsideredasmaterialtopics.These commitmentsarebroughttolifeinourbusinessasillustratedthroughthe manyinitiativessetouthereandwithImpact24nowofferingaframeworkto furtherstrengthentheapproach. Insurance products and services protecting against societal challenges Health and wellbeing Thepandemicincreasedawarenessoftheimportanceofhealthand wellbeingaroundtheworld.AgeasisfullyendorsingSDG3bytakingcare ofpeople’shealthandwellbeingandalsoSDG8,wherecollaborationwith otherpartnersiskeytoofferingnewopportunitiesforgrowth. Whenconsideringinitiativesinthehealthandwellbeingspace,Clínica Médis,thedentalclinicsinPortugalcometothemind,astheconceptis bothinnovativeandunique,meetingtheneedsofsomanypeopleand offeringaccesstooralhealthindependentofwhetheryouareaMédis customerornot.With11clinics,employingaround100dentistsandover 130employees,thedentalclinicsalsocreateopportunitiesforprofessionals tostabilisetheirincomeandensuregrowth.Since2019,morethan22,000 patientsexperiencedadifferentiatingservicethroughpersonalised treatmentplanswhichprovideanindicationofthemostimportant treatmentsinlinewiththeirbudget,offeringphasedpayments.This translatestoanNPSof81outof100reectingtheloyaltyandsatisfactionof customers.SinceMarch,therstdentalclinichubhasbeeninoperationfor testingnewconceptsandservicestoensureafutureproofedapproach.In thiscontext,anewservicecalledclinicalanalysisiscurrentlybeingoffered, andifsuccessful,thisservicewillbeextendedtotheotherclinics. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO 29 Ageas Annual Report 2021 AlsoinPortugal,theMédicoOnline,launchedatthestartofthepandemic, hasproventobeanenormoussuccessinthepastyearwith48,000users andachievinganNPSscoreof4.8outof5.ThisTelemedicineofferallows peopletospeaktoadoctorontheirmobilephoneandtobenetfromthe clinicalplatformsavailablethroughMédis.Inthecaseofprescriptionsor treatments,customerswillreceiveallinformationviamailorsms. Increasingaccesstomedicalservicesoutsideofhospitalsremaineda universalconcernduringthepandemic,andinthiscontext,MBAgeasLife inVietnamsteppeduptodonate10,000onlinehealthconsultationsand Covid-19rapidtestkitstothecommunityasmanypeopleinVietnamlack accesstoevenbasicmedicalservicesandequipment. AGiscreatingapositiveimpactonmentalhealththroughtheReturnto Workinitiative.ThestatisticsinBelgiumareworrying,withalmosthalf amillionBelgiansonsickleaveformorethanayear,andupto24% expressingahighprobabilityofbeingincapacitatedforworkduetostress inthecomingthreeyears.Stressrelateddisordersrequirespecialisedcare, buttreatmentisalltoooftenfragmentedwithextendedwaitingtimes. ThatwasthestartingpointforAGin2017tocreate“ReturntoWork”a voluntaryprogrammeforstaffthatoffersproactive,individuallytailored assistance,aimingtogetstaffwithastressrelatedcondition(e.g.burnout syndrome)tforactivedutyagain. ThenumberofReturntoWorkprogrammeshasdoubledeachyearand roughly70%ofcompletedassistanceprogrammeshaveproventobe successful.Participatingstaffmembersonlong-termsickleaveforastress- relateddisorderwerebackintheworkplaceafterapproximatelysixtoeight months.Thisisamajorachievement,comparedtomarketaverageswhere 50%ofstaffmembersonsickleaveduetosimilardisordersandwhodonot haveaccesstosuchanassistanceprogrammearestillnotwellenoughto returntoworktwoyearslater. The future of health relies on prevention Asaninsurer,weareincreasinglyinvestinginprevention,building partnershipsthatallowustotakecareofpeople’shealthinsteadofpeople’s illnesses.Andwithcancerstilloneofthemostdeadlydisease,severalof Ageas’sbusinessesarepromotingearlyscreeninginitiatives. In2021AgeasPortugalGrouptooktheleadonamajornationwideColon Cancerpreventativecampaign.Withcolorectalcancerrankingasthe3rd mostcommononcologydiseaseinmenandthe2ndinwomeninPortugal, onewouldexpectscreeningpracticeswellembeddedasearlydetection translatestoa90%survivalrate.Unfortunately,thetopicisstillabittaboo, leadingMédis,togetherwiththeNationalAssociationofPharmaciesand theAgeasFoundation,tolaunchacompellingcampaign,invitingthe50+ population(mostatrisk)forscreening.Thekitswereofferedatasymbolic costofEUR5pertest,withtherstkitsbeingfree,aswasthecasefor Médiscustomers.Acomicbookandpowerfultestimonialsraisedthe attentionforscreeningtonewlevels.Thecampaignattractedmorethan 4,000peopleforscreeningandfromthisgroup4.2%wereidentiedas positive,whichprovestheimportanceofsuchinitiatives. Portugalwasnottheonlycompanytosupportpreventionagainstcolon cancer.AGinBelgiumstartedthepartnershipwith“StopColonCancer” alreadysomeyearsagoasalsoinBelgium,coloncanceris,afterlung cancer,thesecondmostcommoncancerforbothmenandwomen. ThroughthispartnershipAGgivesitssupporttoeffortsaroundprevention toencouragepeopletoadoptahealthylifestyle.AGalsoprovidesnancial supporttootherorganisationssuchastheBelgianCancerFoundationand Move4Cancer. AndinMalaysia,Etiqaisalreadyformanyyearsactiveinincentivizing womantoattendbreastscreeningthroughtheEtiqa’sFreeMammogram Programmethathasalreadyreached17,000underprivilegedwomenacross peninsularMalaysia.AndmorerecentlyinNovember,themonththatputs men’shealthinthespotlight,acampaignwasstartedtostimulatemento doregularprostatescreeningasthiscancercanbeeasilyhealedwhen detectedatanearlystage. Takingcareofourmentalhealthisequallyimportant.AgeasUKundertook amuchappreciatedinitiativeinthiseldprovidingresiliencetrainingfor brokers.Themostsignicantannualeventforbrokersandinsurerswas dedicatedtothethemeofresilience.AgeasUKalreadyinvestedintraining onthetopicforitsemployeesandextendedthisinitiativetoitsbrokers. Withthehelpofaprofessionalwellbeingexpert,aseriesofvideoswith practicaltipsrelatedtoemotionalresilienceexclusivelyaimedatthebroker communitywasdeveloped.Andwith1on4brokersattending,theevent wasarealsuccess.ThisinitiativewasonereasonAgeasUKwasnamed PersonalLinesInsureroftheYearattheInsuranceTimesAward. 30 Ageas Annual Report 2021 Ageing Whilescientistsaredividedintheirforecastsoftheworld’spopulation growth,theyarethoughunanimousonthefactisthatpopulationsare gettingolder.Theworldisageing,andthiswillhaveamajorsocialand economicimpactwhichweneedtopreparefornow.Ageasisadaptingits offerlookingatdifferentwaystosupporttheneedsofthisgrowingsegment withecosystemsandpartnershipsbeingstrategicenablerstodoso.Inthis area,AgeasisdemonstratingitscommitmenttoSDG3butalsotoSDG1 andSDG9. InMay2021,EtiqaSingaporelaunchedAMBER,aretirementecosystem. Thenewplatformcomplementstheinsurer’sgrowingrangeofnancial solutionstailoredtosavingsandretirementplanning,byofferingcustomers amoreholisticapproachtolifeinretirement. Asageingpopulationsgrowanddemandforretirement-orientedservices continuestorise,AMBERseekstoeducatecustomersabouttheimportance andprocessofplanningforretirement,providingatthesametimeviable waystonancealonger,moreactiveandmorefulllingretirement.Among itsretirementofferingsisePREMIERretirement,aretirementinsurance savingsplanthatprovidesaguaranteedmonthlyretirementincomeas wellasthefreedomtochooseone’spreferredretirementageandpremium term.Thepolicyholderenjoysprotectionthroughoutthetermofthepolicy. Anothersoon-to-launchretirementproductbyEtiqawillprovidecoveragefor age-relatedillnesses,andexibleretirementincomeoptions. Addressingthephysicalandmentalhealthaspectsofageing,theAMBER ecosystemalsopresentsanarrayofretirement-relatedinformationand servicestoaddvaluetothelivesofpre-retireesandretirees.Asurvey broughttolightthreepressingretirementneeds:toremainemotionally healthyandmentallyable(98%),tobephysicallyhealthy(98%)andtobe lessdependentonothers(97%). Reectingtheorganisation’smottoof‘HumanisingInsurance’,AMBER respondstothesedemandswithAmberAdviser,amatchingserviceto connectcustomerstoavailablelocalserviceprovidersbasedontheirunique needs,fromnursinghomes,caregivingandnursingcaretoprofessional servicessuchasphysiotherapyanddentalcare.AMBERmembersenjoy memberratesonanyservicesbookedthroughtheplatform. AlsoAgeasPortugalGroupoffersaholisticapproachtowardsthesenior populationwith“MaisIdadeMais”,anewumbrellaconceptforseniorswith avaluepropositionbasedon4keypillars:moreincome;moreprotection; morewell-being;morehealth.Regardingthelatter,Médisvintagelaunched in2020,sawitssalesincreasingby50%.Thenewcareservicesand assistancethatfocusesonclients’realneedssuchasuvaccinesand healthathomeservicesareclearlyasuccess.ServiceslikeMédicoOnline andTelemedicinehavefurtherincreasedcustomerconvenience.Andthe newconceptofsavingdecumulationsolutionsforretireesmadeAgeas apioneerinthemarket.TherevampofPersonalAccidentscoveragefor seniorswithexiblecoversandattendantservicesliketravelorhome assistancebringsmoreprotection,together.Thisisalsothecasewitha newsolutionforSeniorCriticalIllnessthatcomeswithadditionalservices likenancialsupportforfunerals.WithmoreservicesinthepipelineAgeas PortugalGroupisbuildingatrueecosystemforseniorpeople. Inclusion Ageaswantstotakecareofthemostvulnerableinsociety,looking atsolutionsthatmakeinsurancemoreaffordableandmoreaccessible reectingSDG1onreducingpovertyandSDG10oneliminatinginequality. Aksigortaisofferingthefairestpricetoitscustomersviaarticial intelligence.Thebasisofinsuranceisthecalculationofrisksthatmay ariseinthefutureandthecostthatwillarisefromit.Makingthiscalculation sensitivelyandaccuratelyalsomakesitpossibletoofferamoresuitable andequitableproductforthecustomer.Alongsidethetraditionalriskmodels developedbyactuaries,Aksigortainvolveddatascientistsandcreated anotherlayerwitharticialintelligencealgorithms,allowingAksigorta’s trafcandautomobileinsuranceproductpricestobemuchmoreaffordable andcompetitive.Aksigortaiscreatingawinwinbyprotectingitscustomers’ budgetsandalsobenettingintermsofprotabilityandmarketshare. Aksigortaisnowthefastestgrowinginsurancecompanyinthemotor business. AgeasFrancehasorganiseditselftocaterforthespecialneedsofthe disabled.Thecompanymakescertainthattherightlegalframework isinplacetoensurethosemostvulnerableinsocietycanbenetfrom advantageousscalconditionsandsubstantialtaxreductionswhen signingupforLifeinsurance.Althoughtheproducthasexistedalreadyfor quitesometime,thecomplexityforinsurersinhandlingalladministrative proceduresmeansitisstillnotthatwellknown.AgeasFranceisoneofthe playersintheFrenchmarketorganisedagainstthisvulnerablesegment whichtodayrepresentsaround5%ofitsportfolioorEUR21million. InlinewithAgeasUK’scommitmentto“UnderstandingPeopleand SimplifyingInsurance”,theAgeasCareProgrammewasdevelopedto supportvulnerablecustomers. Therststepinthistrainingprogrammewastohelppeopleunderstand thecharacteristicsofvulnerabilityfrommanydifferentangles:physicalor mentalhealth,age,lifeeventsorcrime.Itwasrolledouttothecustomer operationsteamintherstinstance,andthendeliveredtoawiderinternal audience,togettheunderstandingfullyembeddedinthecultureandwork modus. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO 31 Ageas Annual Report 2021 Tohelpimprovethelevelofunderstanding,AgeasUKtooktimetolisten tohundredsofcustomercalls,analysedcomplaintsandspoketocharities tounderstandspecicvulnerabilityandtheimpactthiscanhaveona customer.Basedonthoseinsights,aguidewascreatedwhicheveryone couldusetobetterservevulnerablecustomersfromthepricingand designingofproductstohowtocommunicate. Dealingwithvulnerablecustomers,particularlyextremecases,canbe upsettingforthosewhotakethecall.Thisisexacerbatedwhenworkingin ahomeenvironmentwithnocolleaguesphysicallyclosebytotalkwith.An importantpartofthetrainingthereforefocusesonprotectingemployees’ mindfulness,whichisparticularlyimportantduringthepandemic.Achatbot thatusesbuiltintriggerwords,providesanearlyalertthatacustomermight bevulnerable,sothatthemostappropriatesupporttohisorhersituation canbegiven. TiqInvestinMalaysiaismakinginvestmentsmoreaccessible.When EtiqainMalaysiathoughtaboutcreatinganewinvestmentproductforits customers,theemphasiswasonkeepingitsimple,exible,andwithlow entryrequirementstomaketheproductaccessibleforthelessfortunate. Asalow-costonlineInvestmentLinkedinsurancepolicy,TiqInvestbreaks themouldwithpolicymanagementchargesofjust0.75%perannumof theaccountvalue,amongthelowestinthelocalinsurancemarket.And policyholderscaneasilytopupandwithdrawfundsorswitchPackaged Fundsatanytime,freeofchargeviatheCustomerPortal‘TiqConnect’or viathe‘TiqbyEtiqa’App. Climate change Insurershavearoletoplayinmanagingtheclimatechangeandgoing greenisnolongeranicetohave.TheexamplesbelowillustrateAgeas’s commitmenttoSDG13butalsotoSDG9andSDG17. CropInsurancehelpsfarmersmanagetheimpactofclimatechange.Back in2020,AGandDutchspecialistinsurerHageluniejoinedforcestodevelop anofferforfarmersinFlanderstoinsuretheircropsagainstthedamage causedbynaturalphenomenathroughthecomprehensiveclimaterisks weatherinsurance.Farmersareoftenoneoftherstvictimsofextreme weatherevents,frommorestormsandpersistentrain,gusts,andhailstorms tolongperiodsofdroughthavingadevastatingimpactoratworse destroyingentireharvests.ThepartnershipcombinesAG’sknowledgeof thefarmingsectorandextensivedistributionnetworkwiththespecialist expertiseofHagelunieintheeldofagriculturalrisks.Attheendofthe2nd harvestseasontheresultswereagainveryencouragingbothintermsof thenumberofcontractsconcludedbutalsointermsofclaimsmanagement, althoughitremainschallengingtoreachallfarmers.Theextremelywet summerof2021hadasignicantimpactontheagriculturalsector,although mostfarmersdidanticipatethis,harvestingcropsearlier.Thelossofharvest wascompensatedforbythisnewinsurancepolicywithupto80%ofthe damagesufferedpaidout. CropinsuranceisalsoontheagendainAsiawithnewtechnologiesbeing appliedtounderwriting(eg.yieldestimation)andlossassessment(using satelliteimageryordrones).ThroughourjointventurewithTaipingRe, AgeasisactiveinthiseldwithbusinessmainlywrittenfromChina. AGissupportingthetransitiontoagreenercarparkofferingglobalsolutions throughOptimileandSoSimply.WhenAGbecameashareholderofthe scaleupcompanyOptimiletwoyearsago,alongsidepartnersBNPParibas andTouring,itdidsoseethelong-termpotentialinmultimodalmobility services.2021sawafurtherinvestmentofEUR8millionbythepartnersto supportOptimile’sdevelopmentintothesegmentofcharging-as-a-service (CAAS). Withthenumberofelectricvehiclesincreasingparticularlyinthe commercialsector,thegrowingneedforpublicchargingstationsbecamea realityinBelgium.Looselytranslatedthismeansthatifthecountry’sgoalof a100%electroniccommercialvehicleeetby2026istobeachieved,more than100,000newpubliclyaccessiblechargingstationswillbeneeded. Optimile’scloud-basedplatformallowscompaniestoeasilyintegrate electricvehiclechargingintoglobalmobilityofferingstotheircustomers andemployees.Thechargingcardandaccompanyingsmartphoneapp Mobiowprovidesinstantaccesstooneofthelargestnetworksofcharging stationsinEuropewithover135,000locationsin19countries;italsogives informationaboutthepricesandtimeneededforthechargingcreatingmore transparency.Thisecosystemwasfurtherdevelopedin2021througha newpartnershipwithAG’ssubsidiarySoSimply.Theirhomerepairprovider SoSimplyinstallsloadingstations’hardwareattheofceorathome, improvingthedriver’saccesstochargingfacilities. AG’sownemployeescanalreadystartbenettingfromtheCAASoffering andbrokersareshowingamajorinterestininstallingtheinfrastructurefor theirclientsandstaff.Asfrom2022,thisofferingwillbeopenedtoalarge B2BSME,retailandself-employedtargetmarkettocreateaonestop solutionforthecustomer,offeringleasing,CAASsolutionandinsurance 32 Ageas Annual Report 2021 allinone.AdditionalcoversareaddedtotheHome(coverageforproblems causedbytheloadingstation)andCarinsurance(appropriateassistance andclaimsservicestohybridandelectricvehicles)offeringcustomers peaceofmind.Theultimateaimistomakethetransitiontoanelectric vehicleaseasyaspossible. AndstillinBelgium,theEcoscore,aqualitylabelforenvironmentally friendlyvehiclerepairintheautomotivesectorisbeingdevelopedwith thesupportofAG.Whenitcomestovehiclerepairs,thedamageis traditionallyestimatedineuros.Theenvironmentalimpactofthechosen methodofrepairhasuntilnownotbeenconsidered.Thatisabouttochange astheEcoRepairScore®,introducedatthebeginningof2021bythe expertiseagencyVonckandVITO(VlaamsInstituutvoorTechnologische Ontwikkeling)isaquantitativemeasurementthatenablesareductioninthe environmentalimpactofvehiclerepairsinameasurableway.Historicallyfor thosewhowantedtomakeeffortstoreducetheimpactontheenvironment therewasalackofquantitativebenchmarksastheysimplydidnotexist. ThepartnershipwithVITOiskeyinthedevelopmentofthisstandard:they havealong-standingexpertiseinecologicalsustainabilityassessments. TheEcoRepairScore®willnotonlybeusedforindividualrepairs,but alsoforanEcoRepairScanofentireportfoliosandthepresentationofan EcoRepairIndexforthewholeautomotivesector.AG,togetherwithother partnersisnotonlydeliveringnancialsupportbutalsosharingexpertise anddatatotestandvalidatethemodel. Technology and digital, simplifying our products and making them more accessible Inaworldinwhichremoteworkingandservicingbecameincreasingly important,ourdigitalproductshavecontinuedtoevolveoftenpowered bynewtechnologiessuchasAI,increasingaccessibility,convenience andtransparencyforourcustomers.Thisnewdigitallyenabledworld, acceleratedbythepandemic,makesitpossibletoreimaginethecustomer experienceandtomakeinsurancemucheasierreectingourcommitment toSDG9andSDG17. AseriesofnewLifeinsuranceproductshavebeendevelopedtargeted toyounganddigitalsavvycustomersasInvestmentproductsareoften assumedtobecomplexwithtoomanybarrierstoentry.Theaimistomake thesetypesofproductsmoreaccessibleandattractivetoawidermarket includingyoungerpeople,whomighttraditionallybelessfocusedonlife insuranceandlong-termsavings.Aswellasofferingtheprotectiontoenjoy lifetothefullest,theseproductsareparticularlybenecialduringthisperiod ofprolongedlowinterestrates. AnexampleofthisnewgenerationproductsisUppieinBelgium,afully onlineinvestmentproduct,alongsidethenewpartnerKeyTradeBank. InvestmentsstartfromaslittleasEUR10givingaccesstoabroaderand youngeraudience.Savingorinvestingisnotonlysimpleandtransparentbut therearealsonofussformalities.Itisafullydigitalexperiencesupported byanintuitiveinterfaceanddigitalservices.Allwritteninclear,simple language,supportedbyvideoandaudio. InPortugal,YOLO!conrmeditsuniquepositioningintherathertraditional spaceofLifeRiskproductsbyensuringtheprotectionofcustomerssothat theycanenjoylifetothefullest."YOLO!"honoursitsname,basedonthe Englishacronym“YouOnlyLiveOnce”wellspreadonsocialnetworks,asit isclearlyappealingtoyoungersegments,traditionallylessfocusedonlife products. ItisaexibleLifeRiskproductthatallowsthecustomertohavehigher capitalinlifecoveragethanindeathcoverage.Inaddition,thisproduct offersprotectionincaseofasetofseriousdiseasesoccurring. YOLO!providesasimulatortothecustomertohelphimbetterunderstand hisconcernsandprotectionneedsaccordingtoeachlifestyle.Thankstothe innovativemechanism"LifeCycle"itisalsopossibletoadaptthecoverage andcapitaltothemostremarkablemomentsoflife,suchasmarriage, homepurchase,birth,oradoption.YOLO!isalsobasedonstate-of-the-art technologyapplyingamachinelearningmodelclassifyingcustomersand allowingforamoresimpliedsubscriptionprocess. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO 33 Ageas Annual Report 2021 Aftertherstyear,salesovertooktheinitialambition,rejuvenatingtheLife Riskportfolioandincreasingthenumberofnewpoliciestoalmost20,000or morethan160%ThesuccessofYOLO!wasfurtherstrengthenedthrough thelaunchofMillenniumbcpandActivobankapplications. AlsoinAsia,thepurchaseofLifeinsurancehasbeenmadeeasierand moreaffordable.DashPet(whichstandsforProtect,EarnandTransact) isanumbrellapolicywithondemandprotectionsolutions,offeredthrough Singtel,Singapore’slargestmobilenetwork.Thisway,EtiqaSingapore reachesyoungcustomersthatvaluetheexibilityofdailypremium adaptationsandaseamlesspostsalesservice.20,000customersalready subscribedandwithseveralnewfeaturesplanned,afurtherincreasecan beanticipated. Concludingthelistofexamples,TrooFlexinthePhilippinesisa customizabledigitalinsurancesolutionthat’sexclusivelyavailableonthe KomodigitalbankingappofEastWestRuralBankandaimingtomake insuranceeasilyaccessibleandadaptabletocustomer’sneeds.Komo standsfor‘KeepOurMoneyOnline’anexclusivelydigitalbankingservice allowingcustomerstoopenandmanagealltransactionscompletelyonline andallowingcustomerstoenjoyoneofthehighestinterestratesfromany Philippinebanktoday. TheinsurancesolutionTrooFlextargetsyoungFilipinoprofessionals aged20-30yearsold,withexistingbankaccountsandcomfortablewith digitalprocessandservices.Customerscandesignandsubscribetothe healthandprotectionplanfromtheirmobilephoneanytimeanywhereas theunderwritingprocesshasbeensimplied.Theycangetasmuchas ₱1MillionLifeinsurancecover(aboutEUR17,500),accidentaldeath, disablementbenetaswellascriticalillnessbenet. Articialintelligenceisintrinsicallylinkedtodigitalisationasanenabler ofcustomerexperienceandchatbotsforexamplearereshapingtheway insurersoperateandengagewiththeircustomers. ChompooisanAIpoweredChatbotdevelopedbyMuangThaiLife, supportingcallcentreemployeesandagentsinsellingmorecomplex productslikeHeatlhandProtection.Thechatbotanswersallquestionsand providesinformationinaneasytounderstandwayallowinganexcellentand fastservicetothecustomers.ThechatbotoperatesviaChompoowhich isthelargestmessagingplatforminThailandcreatinganatural,seamless experiencelikechattingwithfriends.Todate,Chompooistrainedin9 products.Intotalmorethan3,000usershave‘adopted’thechatbotand morethan33,000questionshavealreadybeenansweredwithanaccuracy levelof89%. TheservicewillsoonbeavailabledirectlytothecustomersviaMTLClick, theprimarycustomerapplicationofMuangThaiLife. AgeasUKcontinuedtodeploytechnologytoimprovethecustomer experienceinitscallcentres.Thishasincludedgreateruseofvoicebots appliedto350,000callsin2021,leadingtoimprovedefciency,reducingthe timespentonthephonewithconsultantsbyaround45seconds.Inaddition, morethanathirdofmotorcustomersnowservicethemselvesdirectly online,includingregisteringandfollowingtheprogressoftheirclaims. Theseimprovementsallowcallcentreagentstoengageinmoreelaborate conversationswithcustomerswhenitreallymatterstothem. Easy to understand, fair and transparent information Communicatinginatransparentandunderstandablewaywith customersremainsatoppriorityforAgeas.Digitisationhasbeenastrong enablertosimplifyourproductsandmakethemmoretransparent.With Impact24wewantallourproductstoberecognisedbyourcustomersas easytounderstand.Providingtoolstohelpmakeinformeddecisionsand investinginnancialliteracyillustratethiscommitmentbringingSDG4to life. EtiqainMalaysiaandtheSwedishretailerIKEAjoinedforcestooffer customersofIKEAanewhomecontentsinsurancesolution.Available online,thepolicyisdesignedtomakehomeinsurancesimpler,more affordableandmoreaccessibletothepublic.With200,000visitsaday, theofferattractsalotofattention.Thankstoafullydigitalapplication processcustomersmakethepurchaseviatheIKEAwebsiteandmanage theirinsurancepoliciesonlinethereafter.Thecomprehensivepolicyoffers homecontents,personalliabilityandpersonalaccidentinsuranceonafast andeasywaywhetherthisrelatestobuyinginsurance,submittingclaims, orreceivingpayouts.Customerswithoutaclaimenjoybonuspoints.The productisappropriatelynamedHEMSAKERderivedfromtheSwedish wordsfor“home”and“security”–perhapsnow,morethaneverbefore, makingourhomesfeellikeasafeplacetobeissomethingwealldesire.In 2021,thenumberofpoliciesgrewby115%. Followingthesuccessoftheradiobroadcastseriesin2020explaining insuranceproductsinaneasyandtransparentway,AgeasPortugalGroup collaboratedinanewseriesin2021.Thistimethefocuswasonprevention withatwist.Awell-knownPortuguesehumoristplayeddifferentroles illustratinghowaccidentsoccurinthecontextofthehouseortrafcorhow healthissuescaneasilyarise,showinghowtopreventthesesituations. Theprogrammewascoveredin24broadcastsreachingupto2,350,000 listeners. AgeasPortugalGrouptakesitsresponsibilityforeducatingandinforming customersinanopenandtransparentwayseriouslyasillustratedbythe projectVozClaraor“understandablevoice”aimedatadoptingsimpleand humanlanguageandbringingthecustomercloser.Theprojectconsists offourpillarsstartingwithprovidingtraining,givenbyanexternalpartner topeoplethatfrequentlyneedtointeractinwritingwiththecustomer.An e-learningcourseisaccessibleforallemployees.Thesecondpillarwas areviewofalloutputsanddocumentsAgeasPortugalGroupsendsto thecustomer.Thetworemainingpillarsarethemonitoringoftheresults throughinternalhalf-yearlyaudits,andthedistinctionofteamsexcellingin translating“vozclara”intopractice. 34 Ageas Annual Report 2021 TheAgeasFoundationinPortugaljoinedforceswithColorADDtolaunchan innovativenewappwhichallowscolourblinduserstoidentifythecoloursof objectsthroughthecameraofamobiledevice. Inaworldwhere90%ofcommunicationisdonethroughcolour,itisestimated thatsome350millioncolourblindpeoplearediscriminatedagainst,relyingon othersforsupport.Thiscansubstantiallyrestricttheirdailylives,andsomany ofthethingswetakeforgranted,whetherinasocialorprofessionalsetting. Thenewcolouridenticationappplaysavitalrolewhenevercolourisusedfor identicationandorientationpurposesorjusttomakechoices.AgeasPortugal GroupistheonlyinsurancecompanyworldwidetoadopttheColorADDcolour codinginitscommunications.AgeasPortugalGrouphasenjoyedalong- standingpartnershipwithColorADDbasedonitsbeliefthatcommunications andlanguageshouldbeasinclusiveaspossible.AsaGroup,Ageasbelieves stronglyininclusionateverylevel,andthisinitiativeisindicativeofthis. Almost5yearsafterlaunchingYongo,asavingsandinvestmentplatformfor kidsatAGinBelgium,theapproachwasfurthersimpliedreinforcingthe valuepropositiontowardsparents.Thefocuswasonwhatmattersmostto them,engagingwiththisdigitalnativegenerationinaneasyandtransparent waytosaveforthefutureneedsoftheirkidsagedbelow8years.Andvery soon,grandparentsalsowillhaveaccesstotheplatformallowingthemtobuild amoneyboxfortheirgrandchildren.Yongowastherstofferinthesenew generationinvestmentstotargetayoungeranddigitalsavvyaudiencewith simpletounderstandandeasilyaccessiblesolutionslikeUppieandYolo! Insurance products and services incentivising responsible behaviour Ageasisawarethatasaleadinginsurer,ithasauniqueroleinincentivising preventiveandresponsiblebehavioursamongitscustomerswhenfacing societalchallenges.Thecompanyseekstocombineitsinsuranceexpertise withtheneedsofsocietytostimulateproductinnovation,embedding sustainabilityinitsproductdevelopment.DifferentexamplesshowhowSDG9, SDG11,SDG13andSDG17areputintopractice. Sustainable solutions Ageashasabroadrangeofsustainableinvestmentsolutionsforretail, privateandinstitutionalinvestors(seealsosection4.5): • Groupinsurancepoliciesthatrespectstrictsustainabilitycriteriasuchas norms-basedscreeningonhumanrightsandILOconventions,negative screeningongambling,animalabuse,….; • Unit-Linkedsustainablesolutionswithafocusonsustainablethemes (diversity,climate,…)orsustainablestrategies(exclusionsofcontroversial sectors,best-inclass,carbonfootprintreduction,...). AGalsooffersabroadandincreasinglylargerangeofsustainableproducts includingpensionproducts,longtermssavingsandunitlinkedproducts. MostofthemhavetheexternalcerticationTowardsSustainabilitylabel.AG decidedtofocusonthiscerticationexplainingatemporarydeclineinthe overallnumberofcertiedproductscomparedto2020andanincreasein thecategory“withoutcertication”assomeproductsareintheprocessof labeltransitioning.AGaimstofurtherincreasethecertiedproductsandis currentlytheonlyinsurerinthemarkettobeabletoofferfullycertiedBranch 21products.In2021,theamountofsustainablesolutionshascontinuedto growthankstothestronginterestfromclients,mainlyinunit-linkedbusiness, bringingthetotalamounttoEUR12.8bn,whichisanincreaseof15%, comparedto2020. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO Discover more about how we are increasing transparent products and services that create economic and societal value. 35 Ageas Annual Report 2021 Increasing environmental awareness AgeasUK’saward-winninggreencarpartsprojectcontinuestogofrom strengthtostrength.Now,around20-25%ofitsrepairsinvolvetheuse ofgreencarparts.AndthankstoAgeas’sinnovativemovetocombineits salvageoperationswithitsgreenpartssupply,oneinveofthegreencar partsitusescomesfromitsownsalvagedvehicles.Thisforward-thinking projectishelpingtoextendthelifeofmaterialsalreadyinexistence,while reducingtheneedformoreplasticandmetaltobeproduced.Andatthe sametime,withproblemsintheglobalsupplychain,greenpartshave proventobeafastersolution.NosurprisethattheABI(Associationof BritishInsurers)selectedgreenpartstofeatureinitslmtoshowcaseat COP26howtheinsuranceindustryisacceleratingitsworktomeetnetzero. EtiqaistheonlyleadingmotorinsuranceandtakafulplayerinMalaysia tooffertheservice“drivelessandpayless”addressingboththefactthat customersarefacingtougheconomicchallenges,accentuatedbyCovid-19, whilepromotingaschemethatnaturallyencourageslesspollution. Drivinglessthan5,000km,givesa30%premiumreduction,withasliding scaleofincentiveslinkedtothereportedmileage.Toqualifyfortherebate, customersonlyhavetosubmitphotosoftheirodometerandcarregistration platesthroughtheEtiqa’sSmileApp,increasingalsotheengagementwith customers. Etiqaisclearlydemonstratingwiththis“drivelesssavemore”initiative howbusinessandsocietalchallenges,liketheenvironment,canmarryto achieveawin-winforthecustomerandtheworldasawhole. With“FiatConnectMotorInsurance”AksigortawastherstintheTurkish markettolaunchanapplicationtrackingvehicleusagedata.Thanksto thecollaborationwithFiat,thenumberofdaysofvehicleusageandthe customer’sdrivingbehaviourcanbeanalysed.Thesedataareevaluated byAksigortaandreectedintheautomobileinsuranceprice.Driversusing theapplicationanddemonstratingtherightdrivingbehaviourbenetfrom discountsofmorethan10%onmotorinsurancepolicies,dependingon theperiodofuseofthecar.WiththisProject,Aksigorta)soldaround4,600 policiesthroughout2021. Asurveyamongstemployeesshowedthatenergyefcientglazingisthe rstandmostimportantanglewhenconsideringincreasingtheenergy efciencyofpeople’shomes.ThatiswhyAgeasPortugalGroupdecided tosetupapilotwithitsemployeestodevelopaserviceaimingrstofall topromoteliteracyontheimportanceofmoreefcientsolutionsinthe medium-longterm,tosupportandadviseontherightchoiceofequipment foreachpropertyandtoofferapartnershipwithasupplierthatguarantees themostappropriatesolutionatacompetitiveprice.Asarstresult,a partnershipwithasupplierwasconcludedofferingemployeesadiscount whensubstitutingwindowsintomoreenergyefcientones. MajoropportunitieslayaheadasAgeasPortugalGroupcurrentlyhasa portfolioofapproximately600,000housingpolicies.Ofcourse,thisisstill aprojectatanearlystage,butitdoesillustrateourrmcommitmentto offersolutionstoourcustomersthatprovideasustainablechoice.Ageas PortugalGroupalreadyhasastrongtrackrecordinthisspacewithsolutions forleakageforinstance. Measuring the effectiveness of the pledges to customers AgeaskeepsoninvestinginmeasuringtheNPSofitscustomers. AgeasisconsistentlydevelopingthetouchpointNPSnotonlyinits consolidatedmarkets,butalsowithinitspartnerships.Graduallythedegree ofimplementationisincreasing.AksigortainTurkeywasalreadymeasuring allofitscustomerjourneys,andin2021,AgeasPortugalGroupdeployed NPSacrossallitsbrandsandinallitslinesofbusiness.Combinedwith afeedbackloopprocess,thishasproventobeagreatapproachtowards continuousimprovementinthecustomerexperience.Thisisalsothecase inAgeasUKthatenjoysastrongtrackrecordinorganisingforabetter customerexperience,bybetterunderstandingtheend-to-endcustomer journey. In2021,wesawsomevolatilityintheresultsofthecompetitiveNPS.While MédisinPortugalstaysaheadofthehealthcaremarketsegmentandAgeas UKwasabletoscorelargelyabovethemarket,somebrandsfellbelow themarketaveragedespitegoodresultsinthetouchpointNPS.Through Impact24strategyAgeasisfocusingevenmoreonthiskeyindicatorto measureprogressinthecustomerexperience.Ageas’scustomerscan expectabest-in-classcustomerexperiencewithatopquartileNPSandthe assuranceofacontinuousimprovementinitsperformance. Number of customers incl. non-consolidated entities (in mio) 2021 2020 Belgium 2.91 2.97 UK 4.32 5.16 ContinentalEurope 9.68 5.18 Asia 27.66 25.53 Total 44.57 38.84 Presence Numberofcountrieswithdirectorindirectpresence 14 14 Customer satisfaction %ofconsolidatedentitieswithNPSbenchmarkingversuscompetitors 58% 58% %ofconsolidatedentitieswithanNPSscoreatorabovelocalmarketaverage 75% 92% %ofcustomerjourneys/touchpointsconsistentlymonitoredontransactionalNPS 71% 61% 36 Ageas Annual Report 2021 4.3 Our employees Material topics covered related to employees • Healthandwell-beingofouremployees • Personalandprofessionaldevelopmentofouremployees ThecontinuedCovid-19crisishas,morethanever,createdchallenging timesforallemployees,intermsofwell-being,belonging,collaboration andbeingpartofabiggerpurpose.Nonetheless,whilere-thinkingAgeas’s wayofworkingandshapingitsownFutureofWork,Ageas’sworkforcehas demonstratedanextraordinaryauthenticengagementandcommitmentto deliveruponallpromises,towardsallstakeholders. Togetherwithitscustomers,Ageas’semployeesareatthecoreofitsbusiness. Inordertofullysupportits40,000employees,spreadoverEuropeandthe jointventuresinAsia,whojoinforceseverydaytodeliver,Ageasisbuilding furtheronitspledgestowardsitspeople.Itrecognisesthecontributionof eachindividual,promotesacollaborative,diverseandinclusiveculturebased onmutualtrust,andinvests,both(i)inpeoplebycreatinganenvironment ofconstantlearningandwell-being,andbyextendingtheinvestmentsin developmentandTalentManagementaswellas(ii)initsworkplaces,making ononehanditsofcesvibrantmeetingplacesforcollaboration,co-creation andlearningexperiences;onanotherhandthehomeworkingplaces convenient,well-equippedlike-ofceworkingspaces,contributingtoabetter work-lifebalance. A ‘Sm@rter Together’ Group Approach InpreparationandanticipationofAgeas’snewstrategicplanImpact24, whichwasdevelopedduringthecourseof2021,anumberofdifferent initiativeshavebeenputinmotionthatdemonstratetheGroup’sambitiontobe aGreatplacetoGrowforallemployees. Insupportofthisambition,adedicatedworkstream‘Sm@rterTogether’, hasbeendeningandshapingacustomisedresponsetothechallengesof thefutureofwork.‘Sm@rterTogether’hasenabledaGroup-wideapproach including: • AdaptedHRpoliciesandprocessesenablingaswiftandexibleresponse tothenewreality,takingintoaccounttheincreaseinhybridandremote working,whilerethinkingandreorganisingtheapproachtoofcework; • Ongoinginvestmentsinnewofces,referredtoas‘GreatplacestoGrow underconstruction’; • Investmentsincollaborativedigitaltoolsandthedevelopmentofdigital skillsforallemployees,whichhasneverbeenmoreimportant; • Changemanagementtracksdevelopedtosupportanadaptiveleadership, culture,andteamcollaborationwithinthenewworkreality,reectingalso thevaluesofAgeas. Great places to Grow under construction Increatinga‘GreatplacetoGrow’fortheAgeasemployees,adynamic workenvironmentisatthecore.Covid-19changedthewayAgeasthinks aboutthefutureofwork,actingasanaccelerator.Itisnotjustaboutthenew phenomenonofhybridworking.Therightphysicalofceenvironmentthat keepspeopleconnectedalsomatters. Ageaswantstocreateaworkenvironmentthatisinspiring,exible,digitally smart,andwithtrust-basedcollaborationandemployeewellbeingfrontand centre.Aspacethatreectsthecultureandvalues,thebackboneofthe company. 2021wasmarkedbythecreationandbuildingofnewsustainableworkplaces wherepeoplecanmeetoreasilyconnectwithpeersworkingremotelyandget workdoneinthespacethatisbestsuitedtotheactivity. A quick tour of all the sites under construction Firstly,theannouncementofplansforanewheadquarters’buildingfor theAgeasCorporateCentre.Thisrelocationtoabrand-newlocation,the ManhattanbuildinginBrussels,willhappeninQ12023.Thisbuildinghas beencompletelyrenovatedanddesignedwiththefutureinmind,putting sustainabilityandwell-beingrst.Thisnewhomebasecorrespondstothe valuesandvisionofAgeasandreectstheGroup’sambitiontobeaGreat placetoGrowforallemployees. SecondlytheexpansionofAGInsuranceofcesincorporatingabrand-new learningandinnovationcentre,theAGCampus.Inthisnewconceptoflearning anddevelopment,employeescansharetheirindividualtalentsandbemutually inspiredbyothers.Employeescantakeadvantageofthemostmodernlearning techniquestoextendtheirskillsandexpertiseandallthisinafullysustainable environmentaimingfornet-zerocarbonemission. AndlastlyinPortugal,newofcesinPortoandLisbonhavebeenbuiltto consolidatesixgeographicallydispersedofcesitesintotwo.Thesestate- of-the-artofceswillcreategreaterproximityandtheconditionsforanew wayofworkingexpressedintheOláamanhãprogramme(‘HelloTomorrow’), incorporatingaswelladedicatedlearninganddevelopmentspace. ThesenewbuildingsaimtobeBREEAMcertiedoncompletion,guaranteeing social,environmental,andeconomicperformance.Frommanagingenergy, water,andwasteconsumptionecologically,totheuseofsustainableorcircular materialsandensuringalltheconditionsofwell-beingforAgeas’semployees. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO 37 Ageas Annual Report 2021 Health and well-being Beinga‘Supporterofyourlife’isnotonlyarmcommitmenttowards customers,butitisalsoarmcommitmenttowardsemployees.Continued effortsareunderwaytofurtherbuildona‘Peoplerst‘companyculturewith newhealthandwell-beinginitiativesforallemployees,introducedacrossall entities,bothlocallyandgroupwide. The Ageas Challenge TheAgeasChallengewaslaunchedaroundtheworldbackin2019.By theendof2021,almost50%ofemployeeswereconnectedthroughadigital platformwhichprovideswell-beingchallengeslinkedtomovingaround,healthy foodandgeneralhealthmanagementideassharedthroughouttheyear.A groupofcolleaguesselectedinSeptember2020toprepareandparticipate inanOlympictriathloninLisbonwereunabletoparticipateinpersondueto continuingCovid-19restrictions.However,inthemeantime,mostwereableto participateinalocalalternativetriathloninBelgiumortheUKwhilekeeping theirdreamsaliveinthehopeofparticipatingin2022alongsideanewly selectedgroupof50employeesfromallAgeasentities. TheglobaltargetfortheAgeasChallenge,setin2021,wastoachieveagoal of3millionkilometresofactivemovement.Bytheendof2021,morethan2.8 millionkilometreshadbeenrecordedonthecounterthankstodailysteps, walks,runs,bikerides,swimsandmanyotheractivitiesfromallparticipants! Challengesthroughout2021,includedtheAgeasTourChallengeduringwhich participantsvirtuallywalkfromoneAgeasregiontoanother;andtheTour deFranceChallenge,duringwhichvirtualteamsrodethesamedistanceas professionalcyclistsinthesameperiod.Newin2021wastheconceptofthe ‘greyjersey’forparticipantsover50yearsandalsonewwasachallengebased ontheconceptoftheOlympicGames,withteamscompletingvesporting challengesandwinningveOlympicringstoreceivetheirownAgeasmedal. Locallyeachoperatingcompanycreatedspecicsolutionsfortheiremployees tosupporttheongoingmental,physical,andnancialwell-beingincluding initiativeslike‘AgeasO’Clock’inPortugal. ‘Ageas O’Clock’ helps employees manage the challenge of home working In2021manyofthePortugueseemployeeswereforcedtoworkmostly fromhomeforCovid-19safetyreasons.Whilsttherearemanypositivesto remoteworking,itbroughtwithitanewsetofchallenges.Moremeetings, moreemailsthaneverandincreasedpressureonemployeestobecomemore organisedandmanagetheirday. Itwasunfamiliarterritoryforall,andtherewasanurgentneedtoensurethat thetimebetweenprofessionalandpersonalliveswasrespectedforthesanity ofeverysingleemployee.Atthesametime,keepingafocusondeliveringfor thecustomerwascrucial. Acknowledgingthischallenge,AgeasPortugalGroupintroducedtheconcept of‘AgeasO’Clock’creatingspecialguidelinesaroundmanagingtimewhen workingfromhome.Asimplesetofguidelinesaroundfourthemeswas established: • Waystobettermanageandprioritiseemails. • Rulestoincreasetheefciencyofmeetingsandtorespectothers’time. • Guidelinesonbestpracticeswheninteractingremotelywithcolleagues • Andnally,recommendationsdedicatedtomanagers,remindingthemto clearlydenewitheachteammemberhowtheywillcollaborate,andthen applyingtrust. Bytheendof202178%ofthePortugueseemployeesandmanagerssurveyed ontheapplicationof‘AgeasO’Clock’-guidelinesconrmedthattheruleshad beenembracedandwereleadingtorealimprovementsintheday-to-day workingenvironment.Thereisstillalearningcurvetogothroughbutatthe sametimetheinitiativeisveryhelpfulinthecontextofahybridworkmodel, thenewreality.Itwillbeasteepslopebutwithmanyemployeesmotivatedand encouragingpeerstojointheproverbial‘AgeasO’Clocktimezone’. EmployeeAssistanceProgramme TheEmployeeAssistanceProgram(EAP)atAGandAgeasCorporate Centre,isaserviceincreasinglyusedbytheemployeesandtheirfamilies.The EAPofferstheemployee,theirpartneranddependentchildrentheopportunity tomakeuseofarangeofprofessionalservicesfreeofchargefromlegal adviceandpsychologicalsupport,tobudgetadviceandleadershipsupport. Servicesareprovidedbyanexternalparty,whosecounsellorsareboundto professionalsecrecyandstrictlycondentialtreatmentofalldata. Employeescanaccessthisserviceeasilybycallingafreephonenumber, sendingane-mail,orgoingtotheonlineplatform.Inaddition,peoplecan consultanonlinelibrary,containingarticleswithtips&tricksonwell-being relatedtopics,anduse‘HappyCare’,anonlineself-helptoolthathelps increasementalresiliencethroughexercises,testimonials,advice,and information. AgeasdirectlycontributedtoSDG3bystimulatinganactiveandhealthy lifestyleapproachforitsemployees. 38 Ageas Annual Report 2021 Talent Management, Talent Retention and Talent Development of our employees WhilelocallyalloperatingcompaniescontinuouslyputTalentManagement, inthebroadestsense,highontheirprioritylist,respondingtotheparticular needsofemployeesatalllevels,Ageashasalsoincreasinglybuiltonits Group-wideTalentManagement,byimplementinganddeliveringtheambitions andcommitmentsestablishedatthestartofConnect21,andbylayingoutthe foundationsforimpactfulTalentManagementinImpact24. Delivering Connect21 Leadership Behaviour Themajorinvestmentinleadershipdevelopment,startingin2020with theroll-outoftheExecutiveDevelopmentJourney,continuedin2021.The ExecutiveDevelopmentJourneyoffersseniormanagerstheopportunity toassesstheirAgeasLeadershipbehaviours.Thejourney,developedin collaborationwithaprofessionalthirdparty,offersacombinationofonline questionnairesandcoachingsessionsdesignedtodiscoverleadership strengthsbutalsoareasofdevelopment.Afterasuccessfulpilotandan acceleratedtrackfortheManagementCommittee,theprogrammewasfurther rolledoutto111seniormanagersacrosstheGroup.Amoreconciseversion oftheprogrammeisnowbeingorganisedbylocalentitiesforthenextlevelof management. TheAgeasAcademydevelopedacustomised360°leadershipscanbased onthefourvalues:Care,Share,Deliver,Dare.Thisallowedforananalysis andidenticationofdevelopmentopportunitiesacrossmultipleprogrammes, bothwithinthelocalentitiesandatGrouplevel.120seniormanagersused thescaninsupportoftheirExecutiveDevelopmentJourney.Inaddition, around130leadershipsscanswereusedinlocaldevelopmentinitiativesand conversations.Theconsolidatedresultofthescanwasintegratedintolocal changeprogrammesimpactingthebroaderrangeofleadershipacrossthe entitiesandtheGroup.Programmesrelatedtofeedbackculture,continuous development,andtrust-basedconversations,havecontributedtoimproved retentionwithintheentities. Dare Series & Instructor led programmes TheAcademycontinuedthedeliveryofvirtualprogrammestosupport developmentinleadershipbehaviour,adaptiveness,resilience,and technology.IndoingsotheAcademywelcomedin2021364participantsfor instructorledprogrammes,2,202participantsfore-learningprogrammesand onlinedevelopmentplatformsand1,025participantsformonthlykeynotesfrom externalexpertscalledtheDAREseries.TheDareseriescoveredtopicssuch as(i)Talentisthenewcurrency,(ii)Blockchain,(iii)Sustainability(v)Customer centricity,(vi)Therenaissanceofthepolymath,...withallsessionsrecorded, sharedandavailableforon-demandview. PreparingImpact24 TheImpact24skillsplanwillfocusontheleadershipandbehavioralskills neededtobecomea‘GreatplacetoGrow’,onthecommercialanddigital expertisetoGrowtheCore,expertiseinecosystemsandplatformstodevelop newGrowthopportunitiesandonprociencyaroundsustainability.Tosupport sustainability,anewe-learningprogrammeonSustainabilitywaslaunchedfor theTop800inSeptember2021. IntheareaofTalentManagement,successionplansforseniormanagement indicateastrongbenchstrength,limitingtheoperationalrisksinbusiness continuity.Inaddition,throughtheidenticationofkeyplayersandhigh potentials,dedicatedcareerconversationsanddevelopmenttrackshavebeen establishedtosupportcareeraspirationsandensuretalentretention.Aswell astheongoingdevelopment,career,andsuccessionactions,severalnew actionswereputinplacetoensuretheachievementoftheGroup’sambitions, specically: • Eachentitywillestablishagenderbalancedpoolofyoungtalentswith thepotentialtogrowintolocalmanagementcommitteerolesandintime, GroupManagementCommitteeroles. • Aplanwillbeestablishedtocoachanddevelopthistalentpool. • Functionaltalentandsuccessionpoolswillbeestablished(e.g.,Risk, Finance…)toidentifytalentsdeeperintotheorganisation,withaviewto raisingtheirvisibilitywithtopmanagement.Thisapproachwillenlarge thefunctionalpoolforvacantpositionsinthecontextofM&Alesor succession. • Successionpipelineswillbefurtherchallengedandcompletedtoensure theyaregenderbalanced. • Finalshortlistsforseniormanagementrolesmustincludeamaleand femalecandidate • CareerconversationswithManagementCommitteemembersaredesigned toincreasevisibilityoftalentsoutsidethehierarchicalline. • ThescopeoftheexercisewillbeenlargedtotheTop800inthisway creatingalong-termperspectiveonpotentialevolutions. Localsolutionsforlocalmarkets AtAGInsurance(Belgium),itwasnoticedthatemployeesintheage group45+,participatedinonlyhalfasmanytrainingprogrammesasother employees.Yetthissamegroupofemployeeshavevaluableexperience,and theircontinueddevelopmentisimportant,regardlessoftheirseniority. Agoalwasagreedtostrengthentheexchangebetweentheseemployees, tostrengthentheirnetworkandcollaborationandtostimulatetheircuriosity andeagernesstolearn.Toreachthisgoalandtocreateawarenessamong thistargetgroup,acommonplatformwasestablished-andthe‘Experienced TalentCommunity’wasborn! Thisgroupissupportedthroughseveralinitiativesdesignedtoinspire,to connect,tolearnandshareknowledgeandexperiences.Nexttoadedicated grouponConnectAG(Workplace),fourinspirationalsessionswereorganised, withasacommonthreadthefourvalues:Yousetthedirection(Care),Itall startswithcuriosity(Share),Thefutureisyourown(Deliver)andDaretojump (Dare). SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO 39 Ageas Annual Report 2021 Duringeachsession,bothinternalandexternalspeakerssharedtheir experienceandexpertise.Participantshadtheopportunitytoconnectand exchangeduringeachsession,withinteractionsorganisedthroughplenary andsmallerbreak-outsessions.Therstreactionswerepositive,andthe initiativewillbecontinuedin2022. TheseinitiativesalignwithSDG4. Employee engagement Tokeepstaffengagedandenabled,feedbackthroughregular engagementsurveyslocallyandgloballyremainskeytomaintaininga strongstrategicfocus.Thishelpstodrivegrowth,cultureandleadership. Despitethedifcultiesposedbytheongoingpandemic,theperformance levelsinthe2021surveyweremaintainedormarginallyimproved.Atleast 50%ofAgeas’soperatingcompaniesachievedanemployeeNPSscorein thetopquartile. Overallparticipationratesremainedeitherthesameorimprovedformostof thecompanieswitha100%participationratefortheAgeasRegionalOfce inAsiaandthePhilippines. Thefollowingstatementsachievedstrongsupport: • “Iampreparedtogotheextramile”and“Ienjoyworkingwithmyteam” receivedmostsupportwith91%ofemployeesagreeingorstrongly agreeing and • “Ihavetrustandcondenceinmymanager”sawthegreatest improvementinscoresyearonyearwitharateof84%in2021. Understandablyalloperatingcompanieshavehadtoprioritisethe unprecedentedchallengesforcedontheworldbyCovid-19.Thefocusof attentionhasbeenoncommunication,well-beingandsupportforremote workingarrangements.Inaddition,somebusinesseshavealsotaken specicinitiativestoworkontheemployeeexperienceandmorespecically progressaroundDiversity&Inclusion. Effortsin2021weremostlyonhealthandwell-being,layingthefoundations forImpact24andthecontinueddigitisationofprocesses,preparationfor Sm@rterTogether,trainingformanagersonhowtoleadteamsvirtually, revitalisinghow,whenandwheremeetingsareconductedandworkingwith engagementtoolslikePeakonwhichenablereal-time,agileresponsiveness toemployeeneeds. WithinthecontextofImpact24andtheHumanResourcespriorities, anchoringpeople,attractingandretainingtalentisincreasinginimportance. Buildinganunderstandingoftheirexperiencemorefrequentlyandatall pointsintheemployeelifecyclewillbekey. I am proud to be part of this organisation I recommend my organisation as a place to work I enjoy the challenges my work oers me I enjoy working with my team I have trust and conﬁdence in my manager I am prepared to go the extra mile Strongly Disagree (%) Strongly Agree (%) Disagree (%) Agree (%) Neither (%) 1 2 1 2 1 1 8 44 46 3 11 38 46 1 7 41 50 2 1 3 14 47 35 3 13 44 38 2 1 2 8 2 1 1 7 48 43 4 13 41 40 44 45 2 1 3 14 51 31 3 14 46 35 14 44 39 13 43 41 1 40 Ageas Annual Report 2021 Diversity and Inclusion Ageashasaclearcommitmenttodiversityandinclusion,expressed throughitsDiversityandInclusionPolicy,aswellasthroughtheambitious targetswhichformpartoftheImpact24strategy’snon-nancialgoals. Ageasworksacrosstheentiregrouptoensurethatallemployees-no matterwhotheyare-feelwelcome,respectedandhavetheopportunityto realisetheirpotentialintheorganisation.TheGroupDiversityandInclusion planlaunchedbackinearly2020aimstodevelopaninclusiveworkplace takingintoaccountgender,age,disability,ethnicity,nationality,sexual orientation,religion,… AGlobalDiversityForumhasbeenestablishedmadeupofrepresentatives fromAgeas’sbusinessaroundtheworldandrepresentativesfromsomeof thejointventure.ThisforumspearheadseffortstodeliverontheImpact24 diversitytargetsandbuildsastrategythatsupportsotheraspectsof diversityandinclusionacrossthebusiness.TheGroup’sinternational workforce–with64nationalitiesworldwideandover21nationalitiesatHead Ofcealone–reectstheinternationalandinclusivenatureofAgeas’s business,embracingtalentinallitsforms. Whileaddressinggenderbalancechallengesisaprimarydiversityand inclusiongoal,theGlobalInclusionForumagreedonthreepriorityareasfor 2021:‘Gender’,‘Disability’and‘5Generations’.Thefollowingactionswere taken:  Acommunicationandawarenesscampaignhasbeendevelopedand specicthemeswereaddressedthroughWorkplacecommunications duringtheyear.Forexample,postswerepublishedonracial discrimination,onfestiveeventssuchasEidMubarak,Ramadan KareemandChineseNewYear.Careerspotlightswithtopfemale executiveswerepublishedtomarkInternationalWomen’sDay.  IncollaborationwithWomeninInsurance(UK)andEuropeanWomen onBoard,developmentopportunitieswereofferedtotalentedfemale managersandhighpotentials.  Allentitiesevolvedpost-Covid-19toanewhybridworking organisationwithamixofworkingfromhomeandworkingatthe ofce.Thismoreexibleworkingorganisationprovidesabetter balanceofprofessionalandprivatelife.  GenderEqualityreportshavebeenestablishedforallentities, includingtheGenderPayGap,rangingfromthelowerendat5%to higherendat25%.Thismeasuresthedifferencebetweentheaverage malesalaryandtheaveragefemalesalary.Thegapismostlydriven bytheunder-representationofwomenatseniorlevelsandintechnical roles,andtheover-representationatjuniorandadministrativelevels. Amoredetailedanalysistomonitorequalpayforequalfunctionsin certainentitiesconrmsthatgenderisnotadifferentiatingfactorfor payinthesamefunction. Forthefuturethreespecictargetsfocusedonincreasingfemale representationatseniorlevelshavebeenestablishedwiththeaimtoreach thetargetsbytheendof2024atthelatest:  GlassCeilingIndex(GCI)-thisisanexternalKPIusedbyWomen inFinancetomeasuretherelativepresenceofwomeninsenior managementpositionscomparedtothenumberofwomeninthe company.Anoptimalscoreis100%.  GenderbalancedsuccessionplansforTop800.  GenderDiversityIndex(GDI)-thisisanexternalKPIusedby EuropeanWomenonBoardtomeasuretherelativepresenceof womenatboardandexecutivemanagementlevelinacompany.The GDIvariesbetween0and2withanoptimalscoreof1. AgeasisamemberoftheBelgianWomeninFinanceinitiativeand EuropeanWomenonBoard,aswellasotherdiversity-focusedorganisations indifferentlocalmarkets. Progressmadetowardsthesetargetsandthegenderpaygapisreportedin thetablebelow. WomeninInsurance,adenitewin IncreatingaGreatplacetoGrow,Ageaswantstopromoteanopen, inclusive,andinspiringcultureforall.InImpact24,Ageasconrmedits commitmenttofurtherincreasethediversityofitsseniormanagement.Asa waytorealisethisambition,AgeasUKdevelopedtheWomeninInsurance (WIN)programmewhichisspecicallyfocusedonthecareerdevelopment andsupportoffemalecolleagues. WINisanin-houseinitiativedesignedtoprovidefemalecolleagueswith theskills,capabilities,andcondencetheyneedtoputthemselvesforward forfutureleadershipopportunities.ThisensuresthatAgeascontinues developingwomenforpromotion.Itisanimportantstepinidentifying highpotentialwomenacrossthetalentpools.157womenhavethusfar completedtheWINprogrammeoverthepast5years,withaquarterbeing promoted.In2021theprogrammecontinuedinremotefashionbutwith participantsdescribingtheprogrammeasenlightening,insightfuland thoughtprovoking. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO Discover more on how we want to create a Great place to Grow for our people. 41 Ageas Annual Report 2021 Measuring the effectiveness of the pledges to employees Thistableprovidesallrelevantnon-nancialinformationasreferredtoabovewithcomparabledataat31December2021and2020. Workforce 2021 2020 HeadcountAgeasincl.non-consolidatedentities 40,012 38,612 Headcountconsolidatedentities 10,723 11,179 Averageage(#years) 42.8 42.9 Averageseniority(#years) 14.0 14.2 Turnover(%) 10.6 9.2 Vacancies(%) 3.6 2.0 Diversity&Inclusion Male/female(totalsplitin%) 46%-54% 46%-54% Male/femaleseniormanagement(top800,splitin%) 65%-35% 66%-34% Male/femaletopmanagement(top300,splitin%) 73%-27% 74%-26% Male/femaleexecutivemanagement(splitin%) 80%-20% 89%-11% Male/femaleboardofdirectors(splitin%) 64%-36% 67%-33% Nationalitiesatheadofce(number) 21 22 Nationalitiesatconsolidatedentities(number) 64 60 GlassCeilingIndex(GCI) 50% 48% GenderDiversityIndex(GDI) 0.68 0.48 Genderpaygap(rangein%) 5%-25% 12%-27% Employee engagement eNPSscore 62.4 51.2 Employeeengagementscore 72.5 69.5 Employeeengagementsurvey(participationratein%) 87% 87% DenisonGlobalOrganisationCultureSurvey(participationratein%) n/a 72% Employee development - Ageas Academy Numberofparticipants: Instructor-ledprogrammes 364 243 DareSeries 1,025 472 Online 2,022 1,476 Numberofprogrammes(instructor-led&dareseriesandonline) 35 32 Averagequality&contentscore(scorefrom1-10) 8.5 8.1 Employee development - Global Traininghoursperheadcount 28 27 Employee well-being TotalAbsenteeismduetoillness(%) 6.1 5.6 Shorttermabsenteeismduetoillness(%) 3.3 2.4 Longtermabsenteeismduetoillness(%) 2.8 3.2 AgeasChallenge(numberofregistrations) 5,162 4,610 Remuneration Totalemploymentcosts(inEURmio) 852 834 RatioofmediantoCEOsalary 20.6 24.2 n/a : not applicable 42 Ageas Annual Report 2021 4.4 Our investors Material topics covered related to investors • Financialresilience • Responsiblegovernance Ageasisallaboutcreatinglongtermvalue:nancialandnon-nancialsgo handinhand,respondingtoinvestors’expectationstobearesponsible,ethical companydeliveringuponthepromisesitmakes. Thepledgestowardsourinvestorsarethefollowing: • Weaimtoachievelongtermsustainablegrowth,andtooffercompetitive returnsandastablegrowingdividend; • Weworktodeliveronthenancialtargets; • Weseekandfosterstrongrelationshipswithinvestorswhosupportusfor thelongterm,basedoncondence,trustandtransparency. Ageasmadeclearcommitmentstoasetofnancialtargets,updatedin Impact24.Thesetargetsontheonehandreectadesireforcontinuityand consistency,butatthesametime,alsorespondtotheevolvingexpectationsof investorswithrespecttothecompany.Financialtargetsmustsupportthelong- termstrategyofAgeastakingintoaccountthetechnological,societalandother challengesitisconfrontedwith.Thenancialtargetsaimtostrikeabalance betweenoperationaltargets,capitalmanagementtargetsbutalsotargetswith respecttosolvency.Thedevelopmentofasetofnon-nancialtargetsshould alsomeetthegrowingexpectationsoftheinvestorswithrespecttothebroader roleofacompanytowardsitsstakeholders. In2021,asurveyamongstourinvestorsrevealedthatAgeascontinuestobe perceivedasaresponsible,ethicalcompanyhavingamajorroleinsociety; complianceandtransparencyareconsideredasstrengths. Measuring the effectiveness of our pledges to investors Theperformanceagainstthenancialtargetsintheclosingyearof Connect21isdescribedinthesectiononA.2Keynancialsanddevelopments. Ageas’sgovernanceapproachisdetailedinsectionA.5CorporateGovernance Statement. Ageasperformsabi-annualshareholderidenticationwiththehelpofa certiedexternalparty.Asat30June2021analystsidentied89%ofthe shareholdersbaseofwhichinstitutionalshareholdersrepresent54%ofall outstandingAgeas’sshares.Thetablebelowreportsontheproportionof longstandingrelationshipwithourmaininstitutionalshareholders. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO LookbackathowAgeashasdeliveredaconsistentlystrong performance over the past 5 years against a range of key performance indicators. InvestorLoyalty 2021 2020 %ofoutstandingsharesrepresentedbytop100investors 50% 45% Ofwhichownforatleast10years 54% 53% %ofsharesownedformin10years 33% 28% 43 Ageas Annual Report 2021 4.5 Our society Material topic covered in relation to society Sociallyresponsibleinvestmentsfocusingonsocietalchallenges Ageascreateslongtermandlastingvalue.Asweendthestrategiccycleof Connect21,weareevenmoreconsciousofourstrengthsandwherewecan makeimpactasaresponsibleactorinsociety. WithinConnect21thestakeholdermodelhasbeenextendedtoinclude “society”asafthstakeholdercategory.Aswithotherstakeholdergroups,the prioritieshavebeencapturedinasetofpledges:  Ourroleasaninsurermeansactivelycontributingtowardsabetter societybeyondinsurance:preparingforanageingpopulation,protecting againstadverseeventsandbuildingahealthiersociety.  Ourbusinessprovidesuswithaplatformtomakeadifference,balancing societalvaluewitheconomicvalueinourcoreactivities. Ageasaimstocontributetoabettersocietyinthreeways:  Aresponsibleandsustainableinvestmentstrategy;  Astrongerfocusonenvironmentfriendlyoperationsandsustainable operationalbehaviour;  Philanthropicinitiatives. In2021,Ageascontinuedtoinvestitsassetsinasustainableandresponsible way,contributingtosolutionsforsustainablecitiesandtheclimatechallenge, andstrengtheninglocaleconomies. Ageaswasabletofurtherreduceitscarbonfootprintwithinitsoperations thankstoseveralinitiatives.Aroundtheworld,severalpartnershipsand concreteactionscontinuetoshowAgeas’scommitmenttosupportlocal communitiesandtoengageinphilanthropicactivities. A responsible and sustainable investment strategy Ageashasalongtrackrecordinsustainability.Therstsustainable investmentsolutionwaslaunchedbackin2007viaAG,theGroup’sBelgian subsidiary,representingsome75%ofAgeas’sinvestmentportfolio.This strategycontinuouslyevolvedleadingtothesignatureofUNPRIbyboth AgeasGroupandbyAGattheendof2018. ByunderwritingtheUNPRI(UNPrinciplesofResponsibleInvestment) thecompaniesformallycommittoincorporateenvironmental,socialand governanceaspectsasafundamentalcornerstoneoftheirinvestmentdecision framework.Sincethen,theframeworkhasbeengraduallyrolledoutwithin theorganisationandbothAgeasandAGInsurancepublishedtheirrstUN PRItransparencyreportin2020.In2021,thesecondUNPRIreporthasbeen submittedbybothentities.ReportsareexpectedtobereleasedinJune2022. Strengthening the approach Ageasiscontinuouslynetuningitsresponsibleinvestmentapproachinline withthestrongerambitionsetbythegroupinthecontextofsustainability.In 2021,itstrengtheneditsexclusionpoliciesbyformallyexcludingnewactivities andsectorssuchasgambling,Arcticticdrilling,shaleoilandgas,oilsands andthetradingoffoodcommodityderivatives. Themaininvestmentprinciplesappliedaresetouthere: We engage We integrate We exclude ESG Integration Unconventional oil & gas extraction Food commodities derivatives Controversial weapons Financial embargo Tax havens Weapons industry Tobacco Gambling Thermal coal Voting & Engagement 44 Ageas Annual Report 2021 Withrespecttotheconsolidatedentities,Ageashasasetofexclusion criteriainplacewithrespecttoamongotherscontroversialweapons (antipersonnellandmines,clustermunitions/bombs,nuclear,chemicaland biologicalweapons,…),taxhavenjurisdictions 2 andcountriessubjectto internationalsanctionsandembargoesandproducersofweapons.These exclusionrulesapplytoallinvestments,exceptforhistoricalbondpositions whichareallowedtomature. Theintegrationofsustainability(ESG)factorshasbecomemainstreamin theinvestmentdecisionprocessacrossallassetclasses.Thesefactorscan createrisksandopportunitiesforcompaniesandarethereforeanintegral partoftheinvestmentanalysis.Fortheentitieswheremostassetsare managedinternally,aproprietaryESGintegrationapproachisinplace.If mostoftheassetsareoutsourcedtothirdpartyassetmanagers,signatories oftheUNPRIareprivileged.Forinfrastructureinvestments,theEquator principles 3 areembeddedintheanalysis. BothinthecontextoftheimplementationoftheUNPRIandTCFD,Ageas andmorespecicallyAGinBelgiumhastakentheleadandmadeprogress withanengagementpolicytowardsinvestedcompanies.AssuchAG intendstoimprovetheESGproleofthecompaniesinwhichitinvests aimingtoreachitslong-terminvestmentobjectives. Followingtheupdatesinourapproachallinvestmentshavebeenassessed ontheirsustainabilityvalue,thescopeofothersocialandsustainable investmentswasenlargedandtwonewcategorieswereaddedtothelistof sustainableinvestments(seetableattheendofthissection): • Greenbuildingsand • Taxonomyalignedactivities. GreenbuildingsmainlyrefertobuildingsownedbyAGRealEstatewitha certicationsuchasBREEAM,WELL,LEED(atleastratedGood,Silveror equivalent).Theothernewcategory“taxonomyalignedactivities”relates tothenewEUtaxonomyregulation:allcompanieswithinthescopeofthe regulationarerequiredtodisclosetheirtaxonomyeligibleandtaxonomy alignedactivities.Basedonthecurrentlyavailableestimatedinformation providedbyAgeas’sexternaldataproviderontaxonomyalignedactivities, thisamountisaddedinaseparatelinetothesustainableinvestments. Currentlythisisabestestimateforalimitednumberofcompaniesinwhich Ageashasinvested,notanassessmentonthefullportfolioastheregulation onlyrequirescompaniestodisclosetheiralignedactivitiesover2022(so externallyreportedearly2023).Moreaccurateandreliabledatawillbecome availableovertime,anditisexpectedthatthisamountwillgrowwith increasinginformation,knowledgeandcompaniestransitioningtoaligned activities.Ageas’sdisclosureoneligibleinvestmentscanbefoundinsection 4.6EUtaxonomy. WithinImpact24Ageasexpressedevenmoreexplicitlyitsambitiontoplay anactiveroleinthetransitiontowardsamoresustainableworldincluding contributingtosolutionstoclimatechange.Throughitsinvestments,Ageas wantstosupportthenetzerogreenhousegasemissiontargetsetby2050 intheEuropeanGreendeal.InthiscontextAgeasintegratestheprinciples setoutintheTCFDrecommendationaspartofitsResponsibleInvestment Framework.Thisframeworkincludesspecicclimatechangerelated principlesthatconsiderthetransitiontoalowcarboneconomy.Overthelast yearinparticular,furtherprogresshasbeenmadetosignicantlyincrease theinvestmentsinrenewableenergyinfrastructuretosupportthetransition toalowcarboneconomy.Thecarbonfootprintoftheequityandcorporate bondsportfoliosiscalculatedinBelgiumandUK.Someclimaterelated metricsdenedintheSustainableFinanceDisclosureRegulation(SFRD) willbefurtherintegratedintotheprocessesgoingforward.InBelgium,the rststepshavebeentakentomeasurethecarbonfootprintofthegrowing infrastructureportfoliowhichcounts58projectsattheendof2021and willbefurtherelaborateduponin2022.Themonitoringandcalculationof carbonintensity,carbonfootprintandothermetricswillbevalidatedand rolledouttotheotherconsolidatedentities. Specicallywithrespecttotheenvironmentalaspectsthefollowing principleshavebeenembeddedinthedecisionmaking:  Exclusionofthemostsensitiveindustries: Exclusionofinvestmentsincoalrelatedactivitiessuchasmining andelectricitygeneration.Onlybondpositionsintheproprietary portfolioarestillallowedtomaturefortechnicalALMcashow matchingpurposes. Nonewinvestmentsincoalrelatedindustriesareallowedandwill befullydivestedby2030. Since2021,exclusionofcompaniesactiveinunconventionaloil& gasi.e.Arcticdrilling,shaleoilandgas,oilsands.  Additionalrestrictivecriteriaareinplaceforinvestmentsin conventionalenergyindustriesspecicallyforinvestmentproducts withasustainabilityfocus.  Increaseininvestmentsintaxonomyeligibleeconomicactivities suchasrenewableenergyinfrastructureandsustainablemobility infrastructureandingreenbonds.  Supportofcompaniesintransition.IntheESGintegrationapproach particularattentionispaidtoenvironmentalfactorssuchasrenewable energyuse,carbonfootprint,reductionprogrammeofgreenhouse gas,environmentalpolicyandqualitativeinformationontheclimate strategyofthecompany,includingcommitmenttoSBTi(Science BasedTargetinitiative).Thisinformationisalsofullyembeddedinthe investmentprocesses. Thesedecisions,affectingallinvestmentactivities,constituteanatural evolutionforAgeasasaprudent,long-termandsociallyengagedinvestor andconrmitsintentiontobearesponsibleinvestor. Specically,withrespecttoenvironmentalobjectives,itaimstoinuence companies’behaviouraimingtofavourgoodbusinesspracticesintermsof ESGandtotackleenvironmentalissuessuchasclimatechange. Tothisend,AGjoinedin2020theClimateAction100+.Thisisaninitiative unitinginvestors,urgingtheworld’slargestGHGemitterstotakenecessary actiononclimatechangeandhelpachievetheParisAgreement’sgoals.In 2021,AgeasandAGbecamesignatoriesoftheCDP(CarbonDisclosure Project),aninitiativewhichurgescompanies,citiesandgovernmentsto measureandpublishclimaterelateddataandtoimplementstrategiesto tackletheenvironmentalissueslinkedtoclimatechange. Ageasalsointendstouseitsvotingrightsconcerningthesemattersto maximiseitsimpactonthetransitiontoalowcarboneconomy.More precisely,AGwillalwaysexerciseitsshareholderrightswhenitholdsat least1%ofacompany’sequitycapital.Forholdingsrepresentinglessthan 1%,itwillconsidervotingonacase-by-casebasis. FollowingitsengagementpolicyAGhasexecuted6directengagements andnearly50throughcollectiveengagementviaClimateAction100+in 2021.Theengagementpolicywillbegraduallyrolledoutwithinallother consolidatedentitiesbeyondAGinthecourseof2022. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO 2 Tax havens have the meaning as determined by the EU 3 https://equator-principles.com/about-the-equator-principles/ 45 Ageas Annual Report 2021 Investing in innovative and sustainable assets Overthelast2years,theCovid-19pandemichadaprofoundand negativeimpactonthelivesandtheeconomyofsomany.InBelgium,AG wasoneoftherstinvestorsinthedifferentBelgianrecoveryfundssuch astheFederalBelgianRecoveryFund,theFlemishWelvaartfonds,the WalloonAmerigofund,andtheBrusselsBoostingBrusselsfund.Inbroad terms,eachfundhastheambitiontohelpcompaniesnavigatethroughthe crisisandcontributetothetransitiontowardsamoresustainableeconomy. ThetotalcommitmentofAGamountstoEUR60million. Ageasalsoprovidesdirectlong-termfundingintherealeconomyincluding infrastructureprojectsthatstimulatetherealclimatetransition,especially viaitsactivitiesinBelgiumbutalsoinFrance,UKandPortugal. Inpracticethisworksviatwodimensions,specicallywithrespectto environmentalandclimatechangesobjectiveswhichinclude: Greeninvestments: • InfrastructureprojectsincollaborationwithAGRealEstatein renewableenergya.o.onshoreandoffshorewindfarmsandsolar panels,greentransportation,certiedbuildings; • Greenbondsandtaxonomyeligibleactivities; Sustainableproducts(moreinformationinsection4.2): • Savingsandinvestmentproductswithrecognisedexternal certicationsuchastheTowardsSustainabilitylabel; • Thematicinvestmentproductswithafocusonclimatechange. Withrespecttothesocialaspectsthistranslatesintopracticeviasocial loansorinvestmentsininfrastructureforeducation,resthomesand hospitals. In2021,AgeashasinvestedmorethanEUR1billioninsustainableinvest- ments.Thisincludesmore thanEUR600millioninvestmentsininfrastruc- ture.Newinvestmentsinrenewableenergyin2021includesolarphotovoltaic parksinSpain, a panEuropean portfolio ofonshore windfarms(Belgium, Germany,Spain,PortugalandFrance),onshorewindinPortugalandacon- centratedsolarpowerplantinSpain.Digitalinfrastructuresuchasbreoptic isalsoagrowingsectorwhereAgeashasbeenveryactivein2021. Additionally,investmentsofnearlyEUR230millionweremadeinsocial housing,EUR40millioninhealth(hospitals),EUR70millionintaxonomy alignedactivitiesandEUR80millioningreenandsustainablebonds. Anamplicationofthesustainableprinciplesin AG Real Estate AGRealEstate,themostdiversiedprivaterealestateinvestorin BelgiumandfullyownedbyAG,activelymanagesitsinvestmentsina sustainableway.Italsoholdsastakeof51%inInterparking,oneofthe leadingEuropeanpublicparkingoperators.Bothcompaniesundertake signicanteffortstoupgradetheirassetsandactivitiestothehighest environmentalstandards.AGRealEstate’sSustainableDevelopmentPolicy providesmorespecicguidelinesonhowitmanagesitsportfolio,andthese principlesareanintegralpartofitsqualitystandards. Consciousofitsenvironmentalandsocialimpactofitsrealestateportfolio, theManagementCommitteeofAGRealEstatehasdecidedinthecourseof 2020tocreatea"CSRCommittee"(CSR=CorporateSocialResponsibility). ThiscommitteeisresponsibleforimplementingAGRealEstate's sustainabilitystrategyandsupervisingtheactionsoftherespectiveteams. ThemissionoftheCSRCommitteewillbetoimproveAGRealEstate's progresstowardsfulladherencetotheUNSDGs,inlinewiththestrategy ofAgeas. AGRealEstate’ssustainabilitystrategyaimstobefullyembeddedinthe entireorganisationandreliesonvepillars,governance,stakeholderofthe city,socialcommitmentandsponsorship,environment&clientandteam.In eachofthesepillarsinitiativeshavebeentakenandfurtherintensied.Also, in2021AGRealEstatehasinitiatedexemplaryactionsintherealestate market. Continuously improving environmental footprint of its buildings Attheendof2021almost80%ofofcebuildingsistelemonitoredacross fourdimensions:electricity,gas,waterandCO2.Havingthesetechnological toolsinplacehelpsdriveconsumptiondown:likeforlikereductionsin electricity,gasandwateramountupto24%,16%and42%comparedtothe 2016referenceyear. TheofcebuildingsintheportfolioaresubjecttoBREEAMcertication InUse,pre-assessmentstakingplaceoverthelastyears.Thiseffortwas continuedin2021,withtheexpectationofmostcerticatesbeingissuedin thersthalfof2022,aimingaminimumlevelof“verygood”. 46 Ageas Annual Report 2021 Poweringupgreenenergycommitments AGRealEstateinstalledthelargestphotovoltaicroofonalogistics buildingatits92,000m²HAVLOGplatforminLeHavreinFrance,designed toreducethebuilding’scarbonfootprintandsupplytheelectricityneeds oftheinhabitantsofthetwomunicipalitiesinwhichitislocated(18,500 inhabitants). AGRealEstateiscertainlynostrangertothistypeofinitiativehavingthis timelastyearinvestedinasolarroofthroughajointventurewithHeylen Warehouses(Belgium).Coveringanextraordinary12.6hectares,this installationhasthecapacitytopoweruptheequivalentof4,500households andsavesalmost12,000tonnesofCO2eqemissionseachyear. Stakeholder of the City Newurbanneedsareaddressedinseveralprojectsforinstancein theDeltasiteprojectinBrussels.Thisnewcitydistrict,foundedbythe constructionofthebrand-newChirechospital,withthehandoverofa retirementhomeandahotelbyAGREnowoffersmultigenerational services,notablyintheformofresidentialfunctionsandstudent accommodation.OrthroughitsinvestmentinCohabs:thisinvestment respondstothegrowingneedofgoodliving,affordabilityandtorevive availablerealestate,anditallowsAGREtofurtherdiversifyitsportfolio. Themostrecentprojectistheinaugurationofanewprojectinthe exceptionalChâtelainareainBrussels.Thischarmingtownhouseoffers19 roomspartlyintendedforsingle-parentfamiliesoradultsintransition. Creating win-win for the environment Oneofthenewprojectsof2021wasthestartoftheconstructionoftwo residentialprojectsinLeuven(Belgium).Duringtheconstructionphase, groundwaterhadtobepumpedup.Insteadofdischargingtotheriver, undergroundpipesbroughtittotheneighboringStellaArtoisbrewerysoit couldbeusedforthebrewery’stechnicalprocessingoperations. Schools of tomorrow AGREhascontributedtotheconstructionof182projectsinFlanders overthepasttenyears,including8passiveprojects,withatotalsurface areaof710,000m²andaccommodatingnolessthan133,000students. 168modernandenergy-efcientschoolprojects(morethan600,000m²) arealreadyinuse.2021markstheyearinwhichthenalschoolstarted tobeconstructed.Basedonavailabledata,thenewconstructionsresult ingasandwatersavingsof60%andmorecomparedtoolderbuildings. Forelectricitysavingsarearound20%,becauseoftheintegrationofnew technologiesoffsettingpartofthesavings. Publicparkingismorethanaspottoparkacar Interparkingoperatestodayalmost950publiccarparksspreadover 9countriesinEuropeandservesabout120millioncustomersperyear (pre-covid). Interparkingisconvincedthatthekeytosuccessfulgreenandefcient mobilityisaboveallmultimodality.Interparkingoffersspacesrightnextto majorpublictransporthubs,forexamplethemetro,tram,buslines,train stationsortoairports.InBelgium,usersofpublictransportcanloadtheir transportticketsstraightontotheirPcard+.ThePcard+notonlyprovides accesstocarparksatanattractiverate,butalsoprovidesaccesstopublic transportnetworksintheBrusselsregion.In2021,avirtualversionof thePcard+,dematerializedinamobileapplicationwasconceivedand developed,andlaunchedinFebruary2022.Itwillprogressivelybeenriched withnewfeaturesinthefuture.Newcarparkscompatiblewiththisnew applicationareconstantlybeingaddedtothelist. Userstodaycancombineseveralmodesoftransporttotravelaroundour cities,forexamplecar,tram,bus,metro,trainandbikesharing.InBerlin,the “E-Park&Rail”onlinebookingmethodenablesyoutobookaparkingspace atBerlinSüdkreuzwhenyoubuytraintickets.InAmsterdamandHarlem, thankstothe“Park&Bike”service,ourcustomerscanbookabikeatan attractiveratetocyclethroughthestreetsofthecity. ThisinitiativecontributestoSDG11andSDG13viathepromotionofpublic transportforshortdistances,stimulatingthechangetowardssustainable andcleanercitiesandpromotingtheuseoflowergreenhousegasemitting publictransportationinsteadofowntransport. Inthecontextoflowergreenhousegastravel,Interparkinglaunchedin September2021apartnershipwithZieglerLogistics,“Cargo-bikes”,a greeninitiativetocontributetoanintelligentandmoresustainableurban logistics.Thislast-miledeliverysolutioncombinesthreeinnovativeelements todeliverlargeparcelswithlowtonearlyzeroCO2emissionsinthecentre ofBrussels:anelectrictruckshuttleconnectsthemainhubtoamicrohub locatedinthedowntownarea,intheInterparkingAlbertine.Fromthere,the cargobikesleavefortheirnaldestination.Thisserviceisnotonlygreener, butalsomoreefcient.TheCargoBikeXXLmakesupto50stopsperday, whereasaconventionaldistributiontruckonlymakesanaverageof25stops inthesametimeframe. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO 47 Ageas Annual Report 2021 WhilemostofthecarparksoperatedbyInterparkinghavealreadybeen offeringparkingspacesdedicatedtobicyclesformanyyears,2021has seentheimplementationofapartnershipcontractwiththecityofAntwerp forthemanagementof32carparks,12ofwhichdedicatedexclusively totwowheels.Thisprovidesatotalof756parkingspotsforbikes.The companyalsoinstalleddynamicsignageinitsbicycleparkingfacilities inthecityofBrugestoindicateinrealtimeabovegroundtheamountof spacesavailableforcyclists.Moreover,theredevelopmentofparkingLoi/ Wet(Brussels,Belgium),whichwasinitiatedattheendof2021andshould becompletedin2022,willfeatureacompleteoordedicatedtocyclistsand cargobikeowners,offeringchargingstationsforelectricbicyclesaswellas atwo-wheelmaintenanceworkshop. TherstgreencreditlineinBelgiumcontractedin2018withpayment conditionsdependenttotheachievementofenvironmentalcommitments, wassuccessfullyconcludedin2020onthetwosaidtargets.Thecompany signedanewgreen5-yearInterestRateSwapin2021withBNPParibas Fortisincludingthefollowingenvironmentalcommitments: • Keep"CO2Neutral"certicationundertakenbyanindependentand certiedbodyinallcountrieswhichInterparkinggroupoperates. • IncreasethenumberofElectricalVehicle(EV)spacesby+300 comparedtothenumberofEVparkingspacesthepreviousyear. Interparkingliveduptothisexpectationintherstyearofthisagreement: thenumberofEVspacesincreasedfromjustover1.000tonearly1.600in 2021. Meanwhile,Interparkingcontinuedtherolloutofthe“lungsinthecity” initiative,inauguratedinJanuary2019attheparkingBeffroiinNamur (Belgium).Atthattime,fourionizationsystems(neutralizingupto70%of particles,40%ofneparticlesand20%ofultraneparticles)hadbeen installed.Todate,atotalof57systemshavebeendeployedinthegroup. Anadditionalorderfor75unitswasplacedattheendof2021,reecting Interparking'sdesiretoexpandthistechnologybroadlyacrossitsnetwork. Interparkingalsoexperimentswithadvantageoustariffsystemsforclients drivinglowemissionorelectricvehiclesintheNetherlands(upto20% reduction).Thesuccessofthisactiontostimulateconsumerbehaviour isdependentonthedatarelatingtotheecologicalclassofacarmade availablebytheDutchgovernmentwhichmightnolongerbethecase movingforward. AllinitiativescontributetotherealisationoftheSDG13climategoals,close totheInterparkingbusiness. A stronger focus on environment friendly operations and sustainable operational behaviour AgeascontinueditsCO2emissionmeasurementbasedoninternational GHGprotocolandincludingscope1,scope2andpartofscope3sourcesof emission.Itincludesallconsolidatedentities:thecorporateheadquartersin BrusselsplustheregionalofceinHongkongandthesubsidiariesAGReal EstateandInterparking.Thescopeofthemeasurementhasbeenenlarged in2021byaddingFranceandITequipmentandstorageintothescope,an increaseintheoverallemissionsbymorethan2,800tonsCO2e,mainlyIT related. Thecalculationsfor2019resultedinanalmoststablelevelofCO2emission ofnearly30,000tonsCO2e.2020deliveredasignicantreductionlargely reectingexceptionalcircumstancesduetoCovid-19,whichisconrmed in2021:lesstravel,useoftheofcebuildingsandcommutingresultedina totalemissionlevelof17,912tonsCO2e,includingscopeenlargement. Moredetailsonthecalculationareavailableinthesummarytableattheend ofthischapter.ThemostimportantcontributorstoAgeas’scarbonfootprint areinscope1careet(45%)andinscope3commuting(22%);dueto theexceptionalcircumstancesin2020and2021businesstraveldropped signicantlyandnowonlyrepresents2%(comparedto14%in2019).This followstheorganisationalstructureofthegroupwithstrongtiesinEurope andAsia,wherebyinthelatterregiontheactivitiesaremanagedoutofthe regionalofceinHongKongandmanagementfollowuprequiresfrequent visits.Thenewcategory“IT”comesinataweightof14%. TostructurallyreduceitsCO2emissions,Ageastookanumberof initiativesstartingin2020thatwillresultultimatelyinaloweremissionand environmentalfootprintgroupwide.Themaininitiativesare:  AprogressivereviewoftheleasecarpoliciesacrosstheGroupaimed atpromotinghybridandelectriccarsforitsemployees;  Anadaptedorganisationalandworkingenvironmentnamed ‘Sm@rterTogether”wherebyemployeesareactivelyencouraged toworkmoreoftheregularworkinghoursfromhome.Itshouldbe notedthattheCO2ecalculationtakesintoaccounttheeffectofthe emissionsofahomeofce;  Areviewedtravelpolicywhichaimstostructurallyreducetravel.For instance,AgeasrepresentativesonlocalBoardsofourAsianjoint ventureswillassistoneontwolocalBoardmeetingsvirtually  MovetogreenelectricityinPortugal;  Approvalofagroupwideenvironmentalpolicywiththeexplicit commitmenttodevelopalong-termprocessofcontinuous improvementtoenhanceenvironmentalprotectionandassuchto minimisethenegativeenvironmentalfootprintwhilstmaximising environmentalopportunities. Havingsettheclimateneutralambitionforoperationsasoneofthetargets ofImpact24,AgeashassetatargettoreduceitsCO2emissionsfor2022 by30%comparedto2019,thebaseyear(lastfullyearbeforeCovid-19). AssuchthefocusisrstonreducingasmuchaspossibleCO2emissions, movingontooffsettingtheremainingemissions.Thisreductiontargetis alsooneofthecomponentsofthemanagementbonusfor2022. Since2015,InterparkinghasaCO2neutrallabelviae.g.,thesupportof theGoldStandardWanrouprojectinBeninaimedatdistributingimproved cookstovestohouseholdsinruralvillagesintheNorthofthecountrywhile AGalsoobtaineditsCO2neutrallabelasfrom2018. 48 Ageas Annual Report 2021 Settingclearexpectationstosuppliers Ageasnotonlyfocusesonamoreenvironmentfriendlymanagementof itsoperationsbutaimstomanagetheorganisationinasociallyresponsible way,expectingthesamefromitssuppliersalso.Somesubsidiarieshave actedevenmorequickly,notwaitingforanupdatedgroupprocurement policy,withESGcriteriaintegratedformallyintotheirsupplierassessment processe.g.atAG,whereadetailedquestionnaireistobecompletedforall keysuppliers;orinPortugal,whenselectingthesupplierforcateringinthe newbuildings.Theselectedsupplierisforinstanceknownforitsintegrative approachtowardsdisabledpersonsintheirteams. Ageas,aresponsibletaxpayer Ageasoperatesatalltimesasaresponsibletaxpayerwithadequate processesandcontrolsinplacetoenablealltaxliabilitiesareaccurately calculatedandalltaxesduearepaidinatimelyfashion.Assuch,Ageas respectsallinternationalandnationaltaxlegislationinallcountriesinwhich itoperates.Ageasdoesnotengageinarticialstructuresthathaveno commercialsubstanceandareintendedsolelyfortaxavoidance.Withthis engagementAgeastakesupitsresponsibilitytowardsthelocalcommunities asanemployerandalocalstakeholderwiththeaimtofundamentally supportthelocaleconomiesanditscitizens.Allcorporatetaxesforthe consolidatedentitiesarereportedinatransparentway(seedetailsinthe tableattheendofthissection). Philanthropyinitiatives TheadoptionoftheUNSustainableDevelopmentGoals(SDG) frameworkisalsoevidentinthenumerousinitiativesundertakenbyAgeas aspartofitsstrongengagementandcommitmenttosociety. TheCovid-19pandemiccreatedveryspecicsocietalproblems,andinthis contextAgeascontinuedtorolloutseveralinitiativestohelpmanagethe situationfocusingonspeciclocalneeds.Andassuch,Ageasbroughttolife itspurposeasa“Supporterofyourlife”.IntotalEUR3.1millionwasinvested inphilanthropicinitiativesreceivingsupportfromAgeas,ofwhichnearly EUR0.7millionrelatestoCovid-19specicinitiatives. Ageascontinuedin2021toshowitsengagementtowardssocietymore broadly.Herearesomeofthemoststrikinginitiatives. AgeasandtheUniversityofAntwerphaveestablishedaSustainable Insurancechairtoresearchthistopicindepth.DoctoralstudentKristien Doumen,undertheleadershipofoneoftheleadingacademicsintheeld ofSustainability,ProfessorLucVanLiedekerke,istaskedwithconducting researchintothebigsocietalissuesthatofferopportunitiesforinsurers toengage.Thisresearchprojectwillamongotherthingsexplorehow sustainabilitymayresultinnewinsurancerelatedproductsorserviceswhich canhelpourcustomerstotransitiontowardsmoresustainablesolutions. WithincreasedpressureoncompanieslikeAgeastoaddresstheimpactof climatechallenge,cybercrimeanddigitisation,socialinclusionanddiversity, thechallengeofanageingpopulationandmore,thisinitiativewaswell timed. AgeasGroupPortugalsupportstheEthicsForum,aninitiativedeveloped byCatólicaPortoBusinessSchooldesignedtoreectonbusinessethics. Aswellaspromotingstrongbusinessethics,thisisaforumforknowledge sharingacrossorganisations.TheEthicsForumalsosupportscompanies totranslateandintegratethelearningsintheworkplacetocreateastrong ethicalculture. IncooperationwithBoğaziçiUniversity,AksigortalaunchedtheDigital SecurityPlatform,acomprehensiveeducationalandinformationresource. Thisuniqueplatformaimstoexplaindigitalrisksatthesocietallevelandto raiseawarenessofthisimportantissuewiththosethatinteractonline. AgeasPortugalalsoprovidessupporttostart-upswithasocialpurpose. WhenAgeasPortugalGroupinvestedinPortugal’srstventurecapitalfund MustardSeedMAZE(MSM),itbecamethelargestcorporateinvestorfor impactstart-ups.MSMinvestsexclusivelyintechnicalstart-upsthatrespond directlytosocialandenvironmentchallenges.Throughitsinvestmentand collaborationwithMSM,AgeasPortugalGroupgainsaccesstoarangeof start-ups,whobringtothetableexcitingnewopportunitiesintheinsurance space,andbeyond.Thisfunddistinguishesitselffrompeersbyonly investingininnovativesolutionsthatrespondtosocietalchallenges,dening impactobjectiveswiththestart-upsinitsportfolio.In2021MSMpaidtribute toHeadofStrategy,InnovationandSustainabilityatAgeasPortugalGroup KatrienBuysawardingherthe“MazeRunner”award.Eachyearthisspecial Mazeawardseekstorecognisethe“relentlesseffortsofanindividualin tacklingsocialandenvironmentalchallenges”. Inpartneringto“growthecore”ofAgeas’sbusiness,severalSDGsare touchedupon:startingwithSDG17butalsotouchingonSDG3,SDG8, SDG9,SDG11andSDG16. AgeasUK,livinguptothevalue“care”,hasbeenapartneroftheRoad SafetyFoundationsince2012campaigningforsaferroadsthatreduce thenumberofdeathsandseriousinjuries2021wasthenalyearofthis partnershipbutovertheyears,severalactionshavebeenundertaken, Theseincludethecreationofaninteractivemaptothe20thannualreport oftheRoadSafetyFoundation“Lookingback,MovingForward”,identifying Britain’ssignicantlyimprovedandpersistentlyhighriskroads.Itidentied aninvestmentpackageofGBP1.2billionwhichwouldimprovemorethan 5,000kmofroadsandpreventmorethan8,000fatalandseriousinjuries overthenext20years.ThiswouldboosttheUK’seconomicrecoveryand protecttheNationalHealthServicebysavingalmostGBP4.4billionover thesameperiod.ThisinitiativealignswithSDG9andSDG11thattryto improvemobilityandaimtocontributetomoresustainablecitiesintheUK. Itgainedmomentuminparticularduringthepandemic(seesection4.2). InPortugal,Ageascontinuestoconsolidateitspresenceandbranding. Todaythisextendstoatotalof11localbrands,ininsuranceandbeyond insurance.Inthelatter,Ageasisapartnertomanylocalassociationsand organisationsintheeldofHealth(seesection4.2)butalsoeducationand asapartnerinsafeguardingthecountry’snationalnatureandheritage. AgeasPortugalGroupisstronglyinvestinginCultureandArtsasastrategic pillarinthebrand'spositioning,combiningnotorietygoals,withastrong contributiontothedevelopmentofsociety.Oneoftheelementsofthe statementofAgeasPortugalGroupisthat“Cultureiseveryone'sright”,and assuch,mustbeaccessibleandinclusivewithoutexception. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO 49 Ageas Annual Report 2021 AgeasPortugalGroupaimstopromoteandtocontinuouslysupportyoung talentamongothersthroughtheAgeasawarddistinguishingemerging theatretalents.Thecompanyalsosupportsnationalculturaleventssuchas theMarvãoInternationalMusicFestivalandisthemainpartnerofimportant andiconicCulturalPortugueseHousessuchasColiseuPortoAgeas,Casa daMusicaandTeatroNacionalD.Maria.Aspecialsolidarityinitiativewas undertakenin2021tosupporttheprofessionalsworkinginthecultural sectorandtheirfamilies,giventhehugeimpactthepandemichadontheir incomes:“ThreeforAll”(orTrêsporTodosinPortuguese),joiningthe PortugueseradioRenascença,inassociationwiththeLisbonCityCouncil broadcastlivemusicalperformancesandinterviewswithdifferentgures intheculturalsceneover3days,whileraisingdonationstotheAudiovisual Union,whichoffersfoodsupporttoaudiovisualprofessionals. TheseinitiativescanbelinkedtotheobjectivesoftheSDG8,SDG11and SDG17astheycontributetothepromotionoflocalculturewhichinturn shouldresultinmoretourism,whilsthelpingtopreservethenationalculture throughlocalpartnershipsintheculturalsector. Tocreateamoreinformedandawaresociety,AgeasPortugalGroup continuestoinvestinpromotingnancialliteracywithyoungpeopleand adultsthroughanewseriesofradiobroadcastsexplaininginsurance productsinaneasyandtransparentwayandwithaspecialemphasison prevention.Moreinformationcanbefoundinsection4.2Ourcustomersand partners. WithAgeasFoundation,AgeasinPortugalgivessupporttostrong socialdevelopmentalongthreedimensions:entrepreneurshipandsocial innovation,corporatevolunteeringandsocialsustainableimpact.One oftheimportantprojectsin2021wasthe“ScoladeImpacto”,areskilling programmeforsociallyvulnerablepeoplereachingmorethan200people overtheyearalone.TheFoundationalsopartneredagainwithNovaSchool ofBusinessandEconomicsinLisboninImpactExperience,focusingontwo capacitybuildingprogrammesfor26socialpurposeorganisations. BothinitiativestwithintherealisationofthegoalsofSDG4. InAsia,initiativestowardssocietyhaveexpandedsignicantlycovering mainlythegoalsofSDG1,SDG3andSDG4. InIndia,AFLIco-sponsorsthebuildofaCovid-19multi-specialtyhospital andacharityorganisationinCentralMumbai.Atthelatter,itisnancially contributinginthepurchaseofequipmentandmachines,andproviding diagnosticservicesandtreatmenttoneedypatientsatextremelyreasonable ratesona‘noprot-noloss’basis.Onanaverageperday,around350 patientsvisitthecentresforconsultationswithdoctorsand/orforundergoing medicaltests.Educationalsupportcomesintheformofassistanceto “InnovativeMindsSchoolofExcellence”inTalegaon.Withalmost600local childrenfromthetribalbeltofMaharashtraattendingclassesatthisschool, converttheclassroomstodigitalclassroomshelpsinvisuallyelaboratingon thecoursematerial,overcomingtheteacher-studentlanguagebarrier,and enablingthestudentstolearnfaster. SamefocusareasinThailand:MuangThaiLifeAssurancegiveshelmetsto motorcycletaxidriversinRatchadaandHuaiKhwangDistrictsforthe"Road Safety"Campaignandsupportstheconstructionofthe“Trade&Finance Lab:WallStreet@UTCC”.Thislabconsistsoftradingroom,multiple learningspaceandnancialproductboard,fortheUniversityoftheThai ChamberofCommerce,allowingstudentstoexperiencevirtualpracticeand toincreasetheexperienceoutsidetheclassroom. TrooorganisedonlineinteractiveworkshopsforFilipinoteacherstoshare bestpracticesindesignthinkingandtohelpteacherstobecomemore effectiveandcreativewithavirtualsetting.Theinitiativekickedoffin theMetroManilaregionandisnowbeingrolledoutmorebroadlyinthe Philippines.InIndia,AgeasFederalLifeInsurancehelpedconvertclassic classroomsintodigitalclassroomssothateducationcouldcontinueduring theCovid-19pandemic. Discover more about Ageas’s long-term, responsible approach to the way we invest and reduce our environmental impact. 50 Ageas Annual Report 2021 SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO Measuring the effectiveness of our pledges to society Thetablesbelowprovideallrelevantnon-nancialinformationasreferredtoabovewithcomparabledataasat31December2021and2020: Responsible investments (in EUR mio) 2021 2020 Totalassetsundermanagement 100,129 101,153 -ofwhichLife,Non-Life&Ownfunds 81,230 84,065 -ofwhichunitlinked 18,899 17,088 Internallymanagedassets-PercentageofnewinvestmentssubjecttoESGanalysis Above95% Above95% Externallymanagedassets-PercentageofexternallymanagedassetsthataremanagedbyPRIsignatory 85% 90% Percentageofnewinvestmentsincoal(),tobacco(),arms(),unconventionaloil&gas(),gambling() 0% 0% Sustainableinvestments() 9,911 6,623 Exposuretosustainableinvestmentsincludingsovereignbonds() 12% 8% Exposuretosustainableinvestmentsexcludingsovereignbonds() 23% 15% Environment 3,069 1,217 -Renewableenergy(includingsolarpanels,windsfarms) 575 420 -Greenmobility(includingtrain,metro,tramways,etc) 426 457 -Greenbuildings 665 Notincluded -Greenbondsandothergreeninvestments 707 340 -Taxonomyalignedactivities() 696 Notincluded Social and sustainable 6,842 5,406 -Socialhousing 3,771 3,864 -Othersocialandsustainableinvestments(includingeducation,resthomes,hospitals,ber-opticinfrastructure) 3,071 1,542 () Taking into account revenue thresholds (**) New exclusions since 30th September 2021 () excluding the assets of the Unit Linked business; sustainable investment has dened in Impact24, double counting has been avoided (*) listed companies, based on revenues (based upon info received from external ESG data provider). In case of an investment ticking multiple categories, the investment is included in the rst description in order to avoid double counting Sustainablesolutions(pension,longtermsavingandinvestmentinsuranceproducts) 12,757 11,194 %versustotalsolutions 17% 15% -Productswithexternalsustainablecertication(includingTowardsSustainabilitylabel) 8,654 10,693 -Productswithoutexternalsustainablecertication(includingESGthematicfunds) 4,103 501 51 Ageas Annual Report 2021 Philanthropy-Communityinvestment(inEURmio) 2021 2020 Cash donations 3.1 6.6 Incometaxbysegment(inEURmio) 2021 2020 ageasSA/NV 20 19 Belgium 136 143 UK 1 5 CEU 58 66 Totalcorporateincometaxcharge 215 233 Carbon footprint in tCO2e 2021 2020 Scope Net total (t CO2e) Relative share Net total (t CO2e) Relative share Scope 1 Directenergy–gas&heavyfuels 2,028 11% 1,810 11% Refrigerants 181 1% 266 2% Ownedvehicles 8,108 45% 7,474 45% Total scope 1 10,317 57% 9,550 57% Scope 2 Electricity–net 479 3% 1,180 7% Total scope 2 479 3% 1,180 7% Scope 3 Home–workcommuting 3,998 22% 5,235 31% Businesstravel 273 2% 559 3% Purchasedgoodsandservices Paper 205 1% 180 1% IT 2,583 14% notincluded Waste 57 0% 76 0% Total scope 3 7,116 40% 6,050 36% TOTALtonnesCO2egross 17,912 16,780 Carbonoffsetting(AGandInterparking) * 8,551 TOTALtonnesCO2enet 17,912 8,229 TonnesCO2eperFTE 1.8 1.6 * to be determined based on signing of offsetting agreements ** including district heating *** restatement of 2020 gures based on data gathering improvements Electricity in detail (tCO2e) 2021 2020 Electricity-gross 3,931 5,005 CO2eavoidedbygreenelectricity 3,452 3,825 Electricity - net 479 1,180 52 Ageas Annual Report 2021 4.6 EU Taxonomy EU’sambitiontowardsnancingsustainablegrowth TheEuropeanCommission’sactionplanonnancingsustainable growthistoreorientcapitalowstowardssustainableinvestmentand ensuremarkettransparency,thusimplementingtheEuropeanGreen Deal:aneconomythatworksforpeopleandensuresajusttransitionthat createsemploymentandleavesnobodybehind.Toachievethisobjective, theCommissioncalledforthecreationofanEUclassicationsystem forsustainableactivities,i.e.aEUtaxonomy.Thispieceoflegislation providescompanies,investorsandpolicymakerswiththedenitionsand criteriaonwhicheconomicactivitiescanbeconsideredasenvironmentally sustainable,anditisexpectedtohelpshiftinvestmentswheretheyaremost needed. Regulation(EU)2020/852(the‘TaxonomyRegulation³’)waspublished intheOfcialJournaloftheEuropeanUnionon22June2020andcame intoforceon12July2020.Itsetsout,amongotherthings,transparency requirementsfornancialandnon-nancialundertakingsinrespectofhow andtowhatextenttherelevantundertaking’sactivitiesareassociatedwith economicactivitiesthatqualifyasenvironmentallysustainable.Underthe TaxonomyRegulation,theCommissionhasbeenempoweredtoadopta delegatedacttospecifythecontentandpresentationoftheinformationto bedisclosed.Thisdelegatedact(the‘TaxonomyDisclosuresDelegated Act’)wasadoptedon6July2021. TheTaxonomyRegulationpresentssixenvironmentalobjectivestowhich economicactivitiescancontribute:climatechangemitigation,climate changeadaptation(thesustainableuseandprotectionofwaterandmarine resources;thetransitiontoacirculareconomy;pollutionpreventionand control;andtheprotectionandrestorationofbiodiversityandecosystems). TheCommissionhasbeenempoweredtoadopttechnicalscreeningcriteria fordetermininga.o.theconditionsunderwhichaspeciceconomicactivity qualiesascontributingsubstantiallytotheseenvironmentalobjectives. Therstdelegatedactestablishingthetechnicalscreeningcriteriadeals withclimatechangemitigationorclimatechangeadaptation(the‘Climate DelegatedAct’)andwasadoptedon21April2021.Thedelegatedactforthe fourotherenvironmentalobjectivesisexpectedtobeadoptedin2022with rstreportingover2022in2023. Reporting requirements for insurance and reinsurance undertakings Article10oftheTaxonomyDisclosuresDelegatedActprovidesfora phasedentryintoforceofthedisclosurerequirementsasfrom1January 2022.Overtheaccountingyear2021and2022(reportingin2022and 2023),nancialundertakingssuchasAgeasareonlyrequiredtoreport onthetaxonomy-eligibilityoftheiractivitiesandtheirinvestmentassets, asfromtheaccountingyear2023(reportingin2024)taxonomyalignment reportingisrequired. Forthetimebeing,inaccordancewiththeTaxonomyDisclosuresDelegated Acta‘taxonomy-eligibleeconomicactivity’meansaneconomicactivity thatisdescribedintheClimateDelegatedAct,irrespectiveofwhetherthat economicactivitymeetsanyorallofthetechnicalscreeningcriterialaid downtherein,anda‘taxonomy-non-eligibleeconomicactivity’meansany economicactivitythatisnotdescribedintheClimateDelegatedAct. ItshouldbenotedthatTaxonomyeligibilityisnotanindicatorof environmentalperformanceandsustainabilityoftherelevantactivity. Insteaditisanindicatorthatanactivityisinscopefortestingagainst therequirementswithrespecttoenvironmentallysustainableeconomic activitieslaiddowninarticle3oftheTaxonomyRegulation(i.e.theactivity (i)contributessubstantiallytooneormoreoftheenvironmentalobjectives setoutintheTaxonomyRegulation,(ii)complieswiththetechnical screeningcriteriafortheenvironmentalobjectiveinquestion,(iii)does notsignicantlyharmanyoftheotherenvironmentalobjectivesand(iv)is carriedoutincompliancewiththeminimumsafeguardsdenedinarticle18 oftheTaxonomyRegulation)andhasthepotentialtobeTaxonomy-aligned ifitmeetstheserequirements. Ageasprovidesinsuranceactivitiesaswellasreinsuranceactivities.This rsttaxonomyeligiblereportinghasbeendrawnupinaccordancewiththe transparencyrequirementsapplicabletonancialundertakings,assetout inArticle10(3)andAnnexesIXandXoftheDisclosureDelegatedAct,the provisionsforthetransitionperiodandtheadditionalguidanceintheFAQ documentissuedbytheEUCommission,aslastupdatedinFebruary2022. ThisdisclosurecoverstheentireAgeasGroupandmatchesthescope ofconsolidationusedfornancialinformationintheconsolidatedannual report. Ageas’sNon-Lifeunderwritingactivities–eligibility reporting ThescopeofreportingforNon-Lifeinsuranceislimitedtoeightlinesof businessofNon-Lifeactivities(Lifeactivitiesareoutofscope),underwriting climaterelatedperils. Theselinesofbusiness(LoB)arethesameasinthemandatoryannual SolvencyandFinancialConditionReport(SFCR),althoughonlyeightoutof twelveareretainedinscopefortaxonomyreporting.Thisexistingreporting isusedasthestartingpointforthegrosswrittenpremiums(GWP)eligibility reportingoninsuranceactivities.ForthelinesinscopeoftheEUtaxonomy, analysisofthetermsandconditionsoftheinsurancepolicieswasperformed tovalidateclimateperilcoverage.ForeveryLoBincludingatleastonepolicy withimplicitandexplicitclimateperilcoveragethefullamountofGWPofthe LoBisconsideredaseligible,minustheGWPrelatedtoexplicitlyexcluded insuranceactivities(e.g.insuranceofstorageoffossilfuels).Asthesedata comedirectlyoutofthenancialinformationsystemsofAgeastheyare includedinthemandatorydisclosurestableandtherearenovoluntary disclosures. Ageasalsoperformsre-insuranceactivitiesinternallyasexternally.The taxonomydisclosureincludestheconsolidatedviewofthereinsurance activities,meaningtheinternallyreinsuranceGWPareincludedintheKPI "eligible"and'non-eligible'activities,andtheKPI“ofwhichreinsured”only reectstheexternalreinsurance.TheKPI“ofwhichretrocession”comprises thetotalamountofGWPstemmingfrominternalandexternalreinsurance activitiesthatwereretroceded. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO 53 Ageas Annual Report 2021 Ageas’s investment activities - eligibility reporting TheTaxonomyRegulationisatransparencytoolintroducingmandatory disclosureobligationsoncompaniesandinvestorsinscope,requiring themtodisclosetheirshareoftaxonomy-eligible/-alignedactivities.This disclosureoftheproportionoftaxonomy-eligible/-alignedactivitieswill enableacomparisonofcompaniesandinvestmentportfolios. ForanancialundertakingsuchasAgeas,withrespecttoitsinvestment disclosures,thismeansthatthecompaniesandprojectsinwhichitinvests mustprovidetheirtaxonomy-data(inaccordancewiththeTaxonomy DisclosuresDelegatedAct)inordertoenableAgeastoperformits taxonomy-reporting.ThequalityoftheAgeasinvestmentreportis dependentthereforeontheavailabilityoftaxonomydataand,ofcourse,the qualityandreliabilityofsuchdata. Sinceallcompanies(nancialandnon-nancialundertakings)onlystart theirtaxonomyreportingasfrom2022,thereislittletonocorporate dataavailableasatthedateofthisreport.Ageasiscloselymonitoring theevolutionofthelevelofintegrationofthesecorporatedisclosuresby itsinvesteecompaniesanditwilltaketimeforthenecessarydatasets tobuild.Sincecurrentlytheunderlyingcorporatereportingelementis missing,nancialundertakingsrequiringthiscorporatereportingfortheir owntaxonomy-reportingoninvestmentsarefacingvariousobstacles whenresearchingandselectingthedatatobeincludedintheirtaxonomy- reporting. AgeasacknowledgesthattheTaxonomyFAQoftheEuropeanCommission indicatesthatTaxonomy-eligibilitydisclosuresbynancialundertakings mustbebasedonactualinformation,andthatestimatesandproxies mayonlybereportedonavoluntarybasisandmustnotformpartofthe mandatorydisclosures.Atthesametime,Ageashastoevaluatethebest wayforwardinordertopresentthedata,butactingprudently,sothatit givesthemostholisticandcorrectviewofitsportfolio’staxonomy-eligibility. Consequently,Ageasisoftheopinionthatthefollowingsplitreportingisthe mostappropriateapproachforthisrstTaxonomyreporting: TherstsectioncontainsthemandatorydisclosuresofdataforwhichAgeas disposedofactualinformationconsideredtimelyavailableforthisreport. Thissectiononlycontainsdataonquantitativeindicatorsrelatedtoits exposuresto(i)realestateandinfrastructureassets(ii)centralgovernment bonds,centralbanksandsupranationalissuersand(iii)derivatives. ThesecondsectioncontainsthevoluntarydisclosuresofdatawhichAgeas maynotdiscloseinitsmandatoryTaxonomyreportandisnotobligedto discloseatallbuthasdecidedtodosovoluntarilyinordertogiveabetter viewonitsinvestmentportfoliofromaTaxonomyperspective.Thissection containsdataonitsexposuresto(i)corporateissuersdataprovidedby arecognizedESG-dataproviderbutwhichareforthemomentbasedon estimates,and(ii)investmentsforwhichnoTaxonomydataiscurrently available. Ineachofthetwosections,atablewithquantitativedataispresented followedbyaqualitativestatementgivingfurtherexplanationsanddetailson thequantitativedata.Theinvestmentsarereportedintheoverviewbelowat theirfairmarketvalueasper31December2021. Non-Life(re)insurancegrosswrittenpremiums2021 Total absolute premiums in EUR mio Proportionof premiums KPI1-Eligibleactivities 3,973 92% Ofwhichreinsuredexternally 335 Ofwhichstemmingfromreinsuranceactivity 79 Ofwhichreinsured(retrocession) 76 KPI2-Non-eligibleNon-Life(re)insuranceactivities 364 8% TotalNon-Life(re)insuranceactivities 4,337 100% Mandatory Disclosures Exposure Value in EUR mio % on total AUM ExposuretoTaxonomyeligibleeconomicactivities 6,477 6.0% ExposuretoTaxonomynon-eligibleeconomicactivities 4,161 3.9% Exposuretocentralgovernmentbonds,centralbanksandsupranationals 45,175 42.0% Exposuretoderivatives 317 0.3% 54 Ageas Annual Report 2021 Thereasonforthelimitednumberofinvestmentassetsattributableto eligibilityornotisthree-fold:(i)asexplainedabove,forthisrsttaxonomy- reportingexerciseonlyverylimiteddataavailable,(ii)alargepartofAgeas’s investmentsarecentralgovernmentexposures,and(iii)variousinvestments aredirectedtoassetsandprojectsthatarenotsubjecttotaxonomy- reporting.Itisexpectedthatinthecomingyears,asmoredataisobtained, theproportionofeligibleassetswillgraduallyincrease. A. Real estate and infrastructure assets Theseassetsarecurrentlytheonlyassetsforwhichreliableand sufcientlygranulardataareavailableinordertoperformanin-house taxonomy-eligibilityassessmentfollowingthedetaileddescriptionsin thedelegatedacts.Theserepresentabout10%oftotalassetsunder managementandareinvestmentsininfrastructureprojectnancevialoans orfundsmainlythroughAGInsuranceandrealestateassetsthatarealmost entirelyrepresentedbytheactivitiesofAGRealEstateandInterparking. B.Exposurestocentralgovernments,centralbanksand supranational issuers Thefollowingexposuresareincludedinthiscategory: • Centralgovernmentbonds:traditionalgovernmentbonds(suchas OLOs),representingthemajorpartoftheexposureunderthiscategory; • Regionalgovernmentbonds:mainlyexposuresinloansandbonds issuedbytheBrussels,FlemishandWalloonRegionandregional governmentsofseveralothercontinentalEuropeancountries; • MunicipalgovernmentbondsmainlyinBelgiumandEurope; • SupranationalissuersandCentralbanks:suchasexposuresinbonds oftheEuropeanUnion,EuropeanInvestmentBankorEuropean Commissionloansandcertaindevelopmentbanks. Duetothecurrentlackofanappropriatecalculationmethodologyforthese exposures,theEUtreatstheminaseparatecategory.Suchinvestmentsare noteasilyattributabletoaspeciceconomicactivityorproject,whichmakes ataxonomy-eligibilityand/or-alignmentassessmentthereofcomplex. Therefore,theseexposuresarefullyseparated.Thisreportingmethodof sovereignexposuresmayevolveandfurtherchangeovertimefollowingan assessmentbytheEUoftheneedofincludingsuchsovereignexposures intheKPIcalculation.TheDisclosuresDelegatedActcurrentlydoesnot provideforadenitionof“exposurestocentralgovernments”.Giventhe reasonforseparatetreatmentofsuchexposuresasexplainedabove,also regionalandmunicipalgovernmentbondsareincludedinthiscategory asthesamereasoningappliestothese.Thisfollowsthereasoningofthe EuropeanBankingAuthoritywhopublishesalistofregionalgovernments, localauthoritiesandpublicsectorentitiesthatmaybetreatedascentral governmentsforthecalculationofcapitalrequirements,inaccordancewith theEUCapitalRequirementsRegulation. ThesesovereignexposuresareasignicantpartofAgeas’stotalexposure, i.e.some42%oftotalAssetsUnderManagementwhichisexplainedbythe factthatasan(re)insurancegroupAgeashasmainlylong-termLifeliabilities withalongduration. C.Exposuretoderivatives DerivativesarecurrentlytreatedasaseparatecategorysincetheEU’s viewisthatderivativesareprimarilyusedinmitigatingcounterpartyrisk ratherthantonanceanassetoraneconomicactivity.Inthissection,the proportionofexposuretoderivativesisverylimitedandmostlyrepresents derivativesusedforhedgingpurposes.Derivativesenteredintheframework ofUnit-Linkedstructuredproductsarenotincludedinthemandatory disclosuresbutinthevoluntarydisclosures. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO Voluntary disclosures Exposure Value in EUR mio % on total AUM Turnover ExposuretoTaxonomyeligibleeconomicactivities 2,951 2.7% ExposuretoTaxonomynon-eligibleeconomicactivities 15,290 14.2% CapEx ExposuretoTaxonomyeligibleeconomicactivities 2,639 2.5% ExposuretoTaxonomynon-eligibleeconomicactivities 15,602 14.5% Exposuretoissuerswithnodata 33,243 30.9% 55 Ageas Annual Report 2021 A. Corporate issuers for which estimates are available Asexplainedabove,evenforundertakingssubjecttotheNFRD, 2022willbetherstyearofreportingontaxonomy.Informationfromthe corporatesitselfwillonlybecomeavailablewhenthesecorporateissuers publishtheirannualreports,witheligibilityinformationbecomingavailable inthecourseof2022andalignmentinformationinthecourseof2023.Yet, ESGdata-providersarealreadysharingdatabasedontheirestimates, withAgeasalsomakinguseofthis.FollowingtheEUcommission’sFAQ guidancethisinformationcanbeprovidedonavoluntarybasis. Corporateissuers(equitiesandcorporatebonds)forwhichtaxonomy- eligibilityreportingdataareavailablethroughESGdataproviders(although currentlylimitedtoestimates)representapproximately69%ofAgeas corporateinvestments,ofwhich16%isestimatedtobeeligibleand84% non-eligible. WithrespecttoUnit-Linkedfundsalookthroughassessmenthasbeen performedasfaraspossible(representingupto66%ofthetotalvalue).To facilitatecomparabilityinreportingbetweenTaxonomy-eligibilityreporting andtoensurecoherenceofthereportingacrossundertakings,disclosures relatedtoTaxonomy-eligibilityoftheassetsandactivitiesofnancial undertakingsarebasedonthedatarelatedtoTaxonomy-eligibilityofthe activitiesoftheirunderlyinginvesteesorcounterparties(turnoverand CapEx). B. Investments for which no data is available Asignicantpartoftheinvestmentportfolio(i.e.31%oftotalAssets UnderManagement)doesnotdisposeofanytaxonomy-databecause: • theinvesteecompanyissubjecttoNFRDbutprovidesnotaxonomy reportingandtheESG-dataproviderdidnotgatherthetaxonomydata yet;or • thenatureofinvestmentbeing“Cashandcashequivalents”;or • thenatureoftheseassetsdonotfall(forthetimebeing)underthe taxonomydisclosureobligations: • Loans(a.o.socialhousingloans,mortgageloans),includingcertain fundingstructures(oftenSPVs)whichprovide(mortgage)loans; • Corporateissuers(equitiesandcorporatebonds)forwhichno taxonomydatais(yet)availablebecausetheinvesteecompanyisnot subjecttoNFRDandprovidesnotaxonomyreporting(suchasSMEs andnon-EUcompanies); • Varioustypeoffunds:privateequityfunds,privatedebtfunds,money marketfunds; • Unit-Linkedfunds:thepartforwhichnolook-throughwaspossible (i.e.fortheCEUsegment). Asaprudentanddefensivelong-terminvestor,Ageasbelievesthat environmental,socialandgovernanceconsiderations(theso-calledESG factors)arekeyinvestmentperformancedrivers,bothfromareturnand riskperspective.Intermsofmanagingitsinvestments,Ageasappliesa long-termvisionbasedonprudence,responsibilityandsustainability.The company'sapproachtosustainableandresponsibleinvestingisbasedon threeprinciples: • theexclusionofcontroversialactivities:inaccordancewithcurrent regulationsandrecognisedstandardsandbasedonitsownconvictions andbeliefs,Ageasidentiesandexcludescountries,sectorsand companiesthathaveanegativeimpactonsocietyandtheenvironment; • theincorporationofenvironmental,socialandgovernancefactorsinthe investmentdecisionprocess:inordertomitigatetheprincipaladverse impactofitsinvestments,theportfoliomanagerstakeintoaccount relevantESGfactorsinallinvestmentdecisions;and • thevotingandengagementpoliciesinrespectofcorporateissuers:asa responsibleinvestor,Ageaswillexerciseitsvotingrightsandwillengage withsomeselectedcompaniesaboutESGpractices.Theobjectiveis toinuencetheactivityorbehaviorofacompanyandtoreducethe sustainabilityriskofitsportfolios. TheresponsibleinvestmentapproachofAgeasisdescribedinageneral frameworkforsustainableandresponsibleinvestmentswhichisapplicable toallitsinvestmentsingeneral.Specicresponsibleinvestmentframeworks havealsobeendevelopedforinvestment-basedinsuranceproductsthat haveobtainedaBelgianreferencelabel,aqualitystandardforsustainable andsociallyresponsiblenancialproducts. Foritsinvestment-basedinsuranceproducts,Ageasandmorespecically itsoperatingentitiessubjecttothisregulation,havebeensubjecttothe SustainableFinanceDisclosureRegulationsinceMarch2021andwill complywiththeadditionalrequirementsthatbecomeeffectiveoverthe comingyears. InJune2021,AgeaslauncheditsImpact24strategy.Ageashasput sustainabilityattheheartofitsbusinesstodrivegrowthandbuildamore inclusiveandsustainablesociety.Withregardstoitsinvestmentbusiness, Ageashastheambitiontoincreaseitssustainableinvestments,tointegrate ESGfactorsinallinvestmentdecisionsandtosupportthetransitiontoa carbonneutraleconomyby2050withanetzeroemissionportfolioby2050. Theimplementationofthisstrategyshouldresultinahigherportionofits investmentsinvestedwhichmayqualifyastaxonomy-eligible(andlater, taxonomy-aligned)activities.However,asa(re)insurancegroupthatacts asaprudentlong-terminvestor,asignicantportionofassetsshallremain investedinbondsofmultiple(local)authorities. Ageas’s view on the way forward Despitetheabove-outlinedissuesregardingtheavailabilityofdataand themanyuncertaintiesthatstillexistatEU-levelinrespectoftheprecise requirementsonwhatandhowtoreport,itisappreciatedthattheEU hasmadeimportantstridestoinitiatethislarge-scaletaxonomyproject whichisabigsteptowardsanenvironmentallysustainableEUeconomy. Whenconsultingthisrsttaxonomyreport,itisimportantthatthereader considersthatthiseligibilityreportingintheearlyyearsalsoservestohelp undertakingsbecomeaccustomedwiththeTaxonomyandtogetprepared fortheiralignmentdisclosuresinthefuture,asexpressedbytheEuropean CommissioninitsTaxonomy-reportingguidelines.Thecurrentapproach totheproductionoftaxonomy-relateddisclosuresmaysignicantlychange overthenextyears.Althoughasignicantportionofthedataprovidedis basedonestimates,Ageasbelievesthatthetaxonomydisclosuresmade availableherealreadyprovideausefulinsightandcondentthatwithina fewyearsthetaxonomywillbefullydeployedandwillformanimportantpart ofitsnon-nancialstatements. 56 Ageas Annual Report 2021 4.7 Safe, secure and compliant insurance Material topic covered related to all stakeholders Responsiblegovernance Integrity, the Touchstone of Ethics Integrityistheleadingpremiseunderpinningsoundbusinesspractices, theexplicitrejectionofanytypeofdiscrimination,theghtagainst corruptionandfraud,theobligationtocontractonlywithtrustedandreliable thirdparties,theprinciplesofrespectforhumanrights,andtheunreserved commitmentofzero-tolerancetounlawfulnessandunacceptablepractices. ThePolicyFramework TheprinciplesofIntegritypermeatethewholepolicyframeworkof Ageas,monitoredonacontinuousbasis,followingawell-structured governanceandroledenition.Allpoliciesarereviewedandformally reapprovedbytheBoardofDirectorsatleasteverythreeyearsandas oftenasthereisatriggeringelementforrevision,forinstance,asignicant changeoflegislation. Thisframeworkofpoliciesisbasedontheregulatoryenvironmentin whichAgeasoperateswhilereectingananalysisoftheriskstowhichthe groupisexposedfromanintegrity,governance,socialandenvironmental perspective. TheGrouppoliciesaretransposedintolocalpolicieswithagraceperiod ofoneyear.ThispolicyframeworktouchesuponallaspectsofAgeas’s businessofwhichthesomeofthemoresignicantonesinrelationto integrityareaddressedhereafter:corruption,conictofinterest,data protection,whistleblowingandhumanrights. Fighting against corruption TheprinciplesofIntegrity,reectedinAgeasCodeofConduct,the IntegritypolicyandtheTreatingCustomersFairly(TCF)policypermeatethe wholepolicyframeworkofAgeas,allconvergingandsupportingConduct andCulture,encompassingthepreventionandghtagainstcorruption,the safeguardingofethics,andthepreventionofcriminalactivities. Severalcompliancepoliciesprovideforaseriesofprocessesthatjointly formabeamofprotective,detectiveandmonitoringrequirementstoprevent criminalactivities.Morespecically: • TheAnti-BriberyandCorruptionpolicydescribestheframeofmind inwhichAgeasintendstooperateandtodobusiness,andsetsout theprinciplesandrulestoabidebytoavoidcommittingorseemingto commitanactofactiveorpassivecorruption,inparticularthewayto handletowardsgifts,advantages,invitationsandhospitalities; • TheConictofInterestPolicyfocusesonthedutyofvigilanceof allstafftowardspotentialoreffectiveconictinginterestsandtheir consequencesontheeffectiveachievementofthecompany’s objectives,establishesareportingprocessofsuchsituations,and providestherulesandrestrictionsapplicabletoexternalmandatesand functions,aswellasnancialparticipationsinbusinessesortrading companies; • ThePersonalTransactionsPolicy(Trading)denestherules,obligations andprohibitionsAgeasInsidersmustcomplywithwhenoperating personalnancialtransactionsinAgeasandotherdesignatedsecurities, conformwiththemarketabuseregulations; • TheAnti-MoneyLaunderingpolicydenesthepreventivemeasuresto implementaswellastheduediligencerequirementsasregardsanti- moneylaunderingandterroristnancingprevention; • TheSanctionspolicydenesthestandardstoapplyregardingcustomer andprovideracceptance,investmentsandmergers&acquisitions, basedontheinternationalrestrictions,imperativesanctionsand black-lists,andrestrictivemeasuresrecommendedbyinternational organisations.Italsolistsspecicattentionpointsleadingtoenhanced duediligenceprocedures; • TheSuitability(FitandProper)policyestablishestheframeworkand setofrulestoapplytoensurepermanentconformitywiththeSuitability obligations. Policiesownedbyotherdepartmentsalsoincludeprinciplesandrules thatcontributetopreventcorruption,specicallytheacceptanceanddue diligencerequirementstowardsthirdparties,suppliers,vendors.Twomajor onesaretheProcurementandtheOutsourcingpolicies. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO More info on topics covered by Ageas’s policies can be found on the sustainability website. 57 Ageas Annual Report 2021 Asownerofkeypoliciesofdirectimportanceintheghtagainstcorruption, theComplianceFunctionplaysadeterminingroleintheirgroup-wide deployment.TheComplianceCommunitytransversallycomprising allComplianceDepartmentsoftheAgeasgroupisparexcellencethe transmissionbelttoestablishandmaintainconsistencyofprinciplesand approachesinallentities.Monitoringandreportingactivitiescarriedout bytheComplianceOfcersinthegroupentitiesandconsolidatedbythe GroupDirectorComplianceuptotheExecutiveCommitteeandtheBoard ofDirectorsprovideacontinuousoverviewoftheactualsituationinthe wholegroup.Complianceconductsmonitoringandcontrolactivities,along astructured,appropriateandproportionateapproachinviewofdetecting potentialnon-compliancesandrisks,andtodeneremedyingactions, followthemupandreportontheoutcomesoftheseactionstotheExecutive CommitteeandManagementCommittee,uptotheBoardofDirectors. Preventingconictsofinterest Fightingagainstcorruptionalsonecessitatesastrongpreventive frameworkwithaclearemphasisonconictsofinterest,encompassing protectivemeasures,capture,settling,follow-upandreportingofpotential andeffectiveconictsofinterest. Ageashasputinplaceafar-reachingpolicyonconictsofinterestas partofthesoundandqualitativegovernanceofthecompanyandits businessactivities.Aseriesoflegalandregulatoryprovisionsimpose clearobligationsinthisrespect.Aconictofinterestisanysituationwith competinginterests,compromisingtheethicalrealizationofthelegitimate purposesofAgeasand/oritsstakeholders,oranyappearanceofsuch situation;conictsofinterestmayinvolveand/orleadtocorruption. Ageashasalsoputinplaceaconictofinterestregister,whereidentied conictsofinterestarerecorded,aswellastheirhandlingandoutcome. Ageas’spositioningtowardslobbyingwasoutlinedinaguidancenote in2021andtheseGuidelinesreceivedtheBoard’sapproval.Ageasis recordedintheEUTransparencyRegisterwiththepurposetobenetfrom someofthepracticaladvantageslinkedtoit,i.e.receivingemailnotications ontheactivitiesofParliament’sCommittees;andbeingnotiedabout consultationsandroadmapsinspecicareas.DiscussionattheBoardand ExecutiveCommitteeconrmedthecommitmentincludedintheAnti- BriberyandCorruptionpolicythatAgeasprohibitsAgeas,itsemployees oragentstomakedirectorindirectcontributionstopoliticalparties, organisationsorindividualsengagedinpoliticsasawayofobtaining advantageinbusinesstransactions.Theexpensesonmembershipsto sectorandprofessionalassociationsequalEUR5.3miofor2021. Protectingyourdatacarefully Ageasrecognisesthat(personal)dataisavitalasset.Withincreasing digitalisationleadingtoalargerdigitalfootprintandgreatercomplexity,its importanceandattractivenessisgrowingtogetherwiththeneedtoprotect it.Combinedwithinformation,datacangiveinsightsaboutcustomers, productsandservices.Itcanalsohelpinnovateandreachstrategicgoals. However,whennotcorrectlymanageditcanbeexposedtomanyrisks includingnon-compliancewithregulatoryandlegalrequirementsaswellas securityrisks.ThatiswhyAgeasfocusesondatamanagementtomaintain andimprove:  theabilitytomakeconsistentdecisionsaboutthevalueofdata;  adaptabilitytochangesintheexternalenvironment;  technicaldeploymentandperformanceoftheunderlyingsystems;  day-to-dayoperations;  compliancewithlawsandregulations;  companyreputation. Ageasiscommittedtotheprotectionof(personal)data,puttingitatthecore ofitsprocesses.AllAgeasinformationassetsmustbeadequatelyprotected fromawiderangeofthreatssuchusmalware,computerhacking,denial- of-serviceattacks,computerfraud,phishing,socialengineeringaswellas theloss,theftordisclosureofcondentialinformation(including–sensitive –personaldata),re,…Informationsecurityisachievedbyimplementing asuitablesetofnon-technical(e.g.policies,processes,procedures, guidelines,governedbyorganisationalstructures)andtechnical(e.g. perimetercontrol,accesscontrol,monitoring,securecoding,…)controls. 58 Ageas Annual Report 2021 InlinewiththeGeneralDataProtectionRegulation(GDPR),Ageas reviewed,overthepastyears,itspersonaldatamanagementframework whichconsistsoftherulesandprinciplesrelativetotheprocessingand protectionofpersonaldatawithinAgeas,itssubsidiariesanditsafliates. Theserulesgivemorerightstodatasubjects,ontheonehand,andprovide strictandformalrulesforAgeaswhenprocessingpersonaldata,onthe otherhand.Processeshavebeenformalisedandallrelevantinformation iscommunicatedtothedatasubjects,includinginformationonthedata transferoutsideEEA.Assuch,Ageashasstrengthenedtransparency andcontrol,protectingtheinterestsofcustomers,staff,andotherkey stakeholdersregardingdataprivacy.Thisframeworkconsistsofpoliciesand standardswhichdescribegovernance(rolesandresponsibilities),processes andtoolstoensurethatpersonaldataismanagedinaconsistentway acrosstheorganisation.Thistranslatesintoageneralincidentmanagement andescalationprocessregardlesstypeofdataandrelatedriskinvolving thecollaborationandinvolvementofdifferentfunctionssuchasLegal, InformationSecurity,ComplianceandRiskManagement.Theexisting frameworkisreviewedonaregularbasistoincludeanyupdatesinlinewith globalandlocalregulations. Ageasalsoinvestsinpermanentawarenessandmandatorytrainingrelated topersonaldatamanagementprocesses.Personaldatamanagementis partofAgeasGroup’sRiskManagementframework(formoreinformation seeGeneralNotessectionC4RiskManagement)andiscomplemented byaDataManagementpolicyandanInformationSecuritypolicyand detailedintheAgeasInformationSecurityFramework.Thelatterisinspired byinternationalstandardssuchasISO27Kseriesaswellasbyindustry bestpracticesregardinginformationsecurity.LikeanyotherAgeaspolicy, thesepoliciesaremandatoryforallAgeassubsidiariesandshouldbe implementedonabesteffortbasisbyAgeasafliates. Ageas’scommitmentsandnumbers: • Wecommittoimplementleadingindustrystandardsonbothinformation security(ISO27Kseries/ISFSoGP)anddataprotection(ISO27K/ ENISA). • Wecommittocollectandprocesspersonaldataforitsstatedpurpose. • Wecommittonotsellpersonaldatatothirdpartiesforcommercial purposes. • Wecommittoaskforclear,specicandinformedconsentwhen processingpersonaldata. • Wecommittocontinuouslyinvestininformationsecurityanddata protectionmeasures. AgeasGroupcloselymonitorsanydatabreach,evaluatesthemviaindustry standardsbasedontheincidentseverityassessmentandreportstothe authoritiesand/orindividualsasrequired.In1%oftecases,breacheswere reportedtotheauthorities(comparedto3%in2020). Whistleblowing ThewhistleblowingframeworkestablishedbyAgeasisdesignedto capturesituationsorcircumstancesthatmayhaveadverseconsequences, andpotentiallyinvolvecorruption. Severalchannelsareinplacetoreportincidentsorwrongfulsituation,orto lodgecomplaints. TheComplianceIncidentReportingPolicy(a.k.a.theInternalAlertSystem) allowsreportingofwrongfulsituationsorincidentsthathaveorcouldhave seriousadverseconsequencesforthenancialstanding,performanceand/ orreputationofAgeasviaawellstructureprocess,availabletoemployees andthirdparties.Theremayindeedbeoccasionswhenanemployeeor thirdpartyhasgenuineconcernsaboutsuchawrongfulsituation.The processdescribedinthepolicyenablestheescalationofsuchconcerns swiftlytotheappropriatesourceforinvestigationandresolution,in condenceandwithoutfearofreprisal.Anycaseisalwayshandledwiththe highestrespectforcondentiality. Towardsthefuture,inviewoftheeffectivetranspositionoftheEU Whistleblowingdirective,technologicalsolutionsarealreadybeing consideredinordertobetimelydeployedinfullcompliancewiththe directive’srequirements.TheComplianceCommunitywilldedicateseveral workingsessionstothisproject. Anotherchannelthroughwhichincidentscanbedetected,istheComplaints Handlingprocess.AComplaintsHandlingpolicyisinplace,thatsetsoutthe implementationrulestodealwithcomplaintsformulatedbycustomersand policyholders,shareholders,suppliersandotherexternalparties.Itstems fromAgeas’scommitmenttoensurethatallitsstakeholdersaretreated fairly.Thisistranslatedintothecompany’sdutytoinformpolicyholdersand otherstakeholdersaboutthearrangementsinplaceforlodgingcomplaints, aswellastheprocessforhandlingthem. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO 59 Ageas Annual Report 2021 Due Diligence and Controls Derivingfromthepolicyprinciplesandprocedures,aseriesofcontrols areinplaceglobally.Controlsaredescribed,assignedanddocumented: • Customers,stakeholders,suppliersandanyotherthirdpartiesare subjecttoproportionateandrelevantduediligence,intermsof identication,absenceofconictofinterest,AML/CTFrequirements, Sanctions,FATCAandCRSstatus; • Contractswithsuppliers,vendorsandconsultantsaresubjecttoa compulsoryandformalisedsign-offprocedure,priortotheirsigning, executedbytheLegaldepartment; • Inaccounting,allthirdparties,suppliersandvendors,areidentied andfollowed-upagainstaseriesofidenticationcriteria.Anyexpense mustbeevidenced.Expenseacceptanceandpaymentfollowatwo-tier procedurewithdoublesignature; • Remunerationsandinducementstoandfromdistributorsofproductsare subjecttomonitoring; • Inaddition,Ageas’sSuitabilityFrameworkoutlinestherules,standards andprocessesdesignedtoensurethatbodiesandindividualsentrusted withmanagerialdutiesareatalltimestandproper. IntheeldsofInvestmentsandMergers&Acquisitions,policiesand proceduresintegratethesecontrolsasappropriatebutalsodenefurther advancedandfar-reachingduediligencerequirements. Besidesthesecontrolprocesses,noticationdutiesapplytoallAgeas staff.Inpractice,allstaffmembersareinformedfromthestartoftheir employmentoftheirobligationtoabidebythepoliciesandtotakethe necessaryinitiativestofullltheirnoticationduties,alongthecriteria describedinthecorrespondingpolicies.Incaseofissuerevealedfurther toanotication,adecisionismadebytheappropriatesourceand communicatedtothenotier.Thisdecisionisbinding.Forexample,agift thatdoesnotmeettheacceptabilitycriteriahastobereturnedtothesender, oranexternalmandatethatwouldnotbecompatiblewiththefunctionat Ageashastobedeclined. NoticationstobemadetotheCompliancedepartmentconcern: • Gifts,advantages,invitations,hospitalities,whethergivenorreceived; • Externalmandatesorfunctions; • Financialparticipationinabusinessoratrade; • PersonaltransactionsinAgeassecuritiesand/orotherrestricted securitiesdesignatedbyCompliance. NoticationstobemadetotheLegaldepartmentconcern: • Membershipstotradeandprofessionalassociations; • Potentialandeffectiveconictsofinterest. 60 Ageas Annual Report 2021 Human Rights TherespectforhumanrightsbyAgeasisakeyunderlyingelementofits globalpolicyframework.Itmanifestsitselfconcretelyinaseriesofdomains andAgeas’scommitmentisclearlycommunicatedintheHuman&Labour RightsGuidingPrinciples. AgeasfullysubscribestotheUNUniversalDeclarationofHumanRightsand theInternationalLabourOrganisation’sCoreConventionsandthefollowing commitmentsapplytoallAgeasemployeesandcontractorsworkingfororon behalfofthecompany:“Weconductourbusinessinamannerthatrespects therightsofallpeople,respectinghumanrightsandavoidingcomplicityin humanrights abuses,as stated in the UNGuiding Principles onBusiness andHumanRights”. Human Rights Risk Assessment In2020,AgeasformallysubscribedtotheTenPrinciplesoftheUnited NationsGlobalCompactonhumanrights,labour,environmentandanti- corruptionandin2021,Ageashasperformeditsrstbusiness-widehuman rightsriskassessmenttosupporttheidentication,managementand reportingofsalienthumanrightsissues. How Ageas went about it AgeascreatedaquestionnairebasedontheUNGlobalCompactSelf- AssessmentToolandtheUNGuidingPrinciplesonBusiness&Human Rightsforcompletionbyallconsolidatedentities. Theself-assessmenttoolisasetofquestionsthatseekstogaugea business’positioninrespectofspecicrightse.g.health&safety,training, workinghours,wages,discrimination,childlabour,…whereastheUN GuidingPrinciplesonBusiness&HumanRightsfocusonthepoliciesand processesabusinessshouldhaveinplacetomeettheirresponsibilityto respecthumanrights. Initial, high level results CompletionofthisHumanRightsassessmenthasshownthatacross thedifferentbusinessesthereiscurrentlyawiderangeofpolicies andproceduresthatcapturenotonlyAgeas’scommitmenttomeet itsresponsibilitytorespecthumanrightsbutalsohowtodeliveron thatcommitment.Theyincludeprocessesandcontrolstosupportthe understandingofAgeas’simpactsonhumanrights,minimisethepotential foranyadverseimpactand,wherepossible,makeaspositiveanimpactas possible. TheHumanRightsassessmenthasshownthatsomeentitieshavemore matureprocessesandcontrolsthanothersandthereisopportunitytoshare bestpracticeandintroduce,whereappropriate,furthercommonalitiesof approach. GiventheimportanceAgeasplacesonthistopic,aworkinggrouphas beenassignedtofollowupontheoutcomeofthisassessmentandto createagroupwideactionplantofurtherstrengthenandcontinuetoraise awarenessontherespectandimplementationofAgeas’sapproachto HumanRightsbothinternallyandexternally. Salient Human Rights Issue Identifyingsalienthumanrightsissuesisaboutassessingwhichrightsare mostatriskthroughthecompany’sactivitiesandbusinessrelationships, andthereforewheretofocusattentionandresources. ThetablebelowhighlightsthoserightsthatAgeasbelievesitsbusiness activitieshavethemostpotentialtoimpact,directlyorindirectly. Salient Human Rights Issues Direct Inﬂuence Employees Workplace discrimination & Harassment Labour Rights Financial Distress Privacy Human Rights Issues Generally Insurance Investments Mergers & Acquisitions 3rd Parties / Procurement Indirect Inﬂuence Forconsolidatedentities SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO 61 Ageas Annual Report 2021 Asanemployer,Ageasendeavourstocreateanenvironmentwithdiverse culturesandbackgrounds,andtoencourageeveryonetoembracediversity. FormoreinformationseesectionA.4.3Ouremployees. Nevertheless,Ageasismindfulthatworkplacediscriminationand harassmentcanoccurandhaveputinplaceclearguidanceonits expectationsforitspeopleine.g.CodeofConductandDiversityand Inclusionpolicy,mechanismsforgaugingstaffsentiment,likeemployee engagementsurveys,andaComplianceIncidentReportingpolicy(a.k.a.the InternalAlertSystem)mentionedearlierinthischapter.Inaddition,Ageas’s SuitabilityFrameworkoutlinestherules,standardsandprocessesdesigned toensurethatbodiesandindividualsentrustedwithmanagerialdutiesareat alltimestandproper. Asaninsuranceprovider,Ageasaimstoensurethattheinsuranceproducts andservicesitoffersmeetthedemandsandneedsofitscustomers.Inthe eventAgeasdoesnotunderstanditscustomers’circumstancesandneeds, inappropriateproductsandserviceshavethepotentialtoadverselyimpact customerwell-being,includingstandardofliving,andresultinnancial distress.ThesectionA.4.2Ourcustomersandpartnersdemonstrates howproductsaredesignedwithcustomerneedsattheircentre.TheTCF policyservesasasetofminimumstandardstoensurefairoutcomesfor customersa.o.thatproductandservicesolutionsmeetidentiedcustomers’ needs,thatcustomersareprovidedwithclear,completeandtransparent informationandsoundadvice,thatcustomersareinformedaboutwhat isandwhatisnotcoveredbytheproductandthattheydonotface unreasonablepost-salesbarrierstochangeproduct,switchprovider,submit aclaimormakeacomplaint. AgeashasimplementedaProductApprovalpolicyandprocessthat stipulatesthatnewproductsandmaterialchangestoexistingproducts mustundergoarigorousapprovalprocess,whichincludesESG,and thatpost-launch,productperformanceissubjecttoregularmonitoring. Acomprehensivesuiteofmetricsexiststomonitorproductperformance suchasclaimsvolumes,claimsrepudiationrates,lossratio,complaints, targetmarketcoverage,…andactionistakentoaddressanyweaknesses identiedtominimisecustomerdetriment. Aboveinthissectionmoreinformationondatasecurity/privacyisprovided. Asaprocurerofgoodsandservices,Ageashasrelationshipswithmany businesses.TherearespecicreferencestoHumanRightsinbothAgeas’s ProcurementpolicyandOutsourcingpolicy,andthirdpartyrelationshipsare expectedtofullycomplywithapplicablelawsandregulationsandtoadhere tointernationallyrecognisedHumanRightsandbroaderEnvironmental, SocialandcorporateGovernancestandards(ESGstandards).Extra attentionwasgiventothistopicin2021asdescribedinthesectionA.4.5 Oursociety.Enteringsupplierandserviceproviderrelationshipsissubject tosatisfactoryresponsestohumanrightsandESGrelatedquestions withintheduediligenceprocess.Clausesareincludedincontractsthat requirethirdpartiestoalertAgeastoanybreachoflaws,regulationsand internationallyacceptedstandardsinstantly.Auditrightsexisttoensure Ageascanundertakeindependentassuranceactivities. InsurersaresignicantinstitutionalinvestorsandAgeasisnoexception. Integratingconsiderationofhumanrightsrelatedrisksintonegativeand positivescreeningprocessesisoneoftheelementsconsideredinthe ResponsibleInvestmentFramework.Moreinformationcanbefoundinthe sectionA.4.5OurSociety. The key role of the Compliance function TheCompliancefunctionisamajorplayerinthepromotionand safeguardingofIntegritywithintheorganisation.Positionedasan independentcontrolfunction,nexttotheRiskManagementandActuarial Functions,onthesecondlineofdefenseoftheorganisation,Compliance aimsatmakingsurethatatanytimeandplace,Ageasconductsbusiness insuchawaythatifandwhenquestionedsomewhereinthefutureabout itsbusinesspractice,itcanstandupandsaythat,ifitweretostartover, itwoulddoitinthesamewayagaintakingintoaccountthethenprevalent situation. Thecompliancefunctionmustpreventthecompanyfrombearingthe consequences-inparticularlossofreputationorcredibility,whichmay causeaseriousnancialdisadvantage–ofnon-compliancewithlegaland regulatory,ordeontologicalprovisions. ThecompliancefunctionisanindependentfunctionwithinAgeas,which aimsatprovidingreasonableassurance(inanex-postperspective)that thecompany,itsemployeesanditsstakeholderscomplywiththelaws, regulations,internalrulesandethicalstandards. 62 Ageas Annual Report 2021 A determining factor: the Compliance Culture In2021,severalinitiativeswereconductedtomeasurethecompliance cultureinthegroup,todetermineweakerareasandtodeneactionsas relevant.Itmorepreciselyencompassedacompliancesurveyaddressed toallstaffforthepurposeofcapturingtheirperceptionofcompliance,alist ofcompliancecultureKPIsdenedbyadedicatedcomplianceworkgroup, theoutcomeofseveralconvergingstreamsofactivitiesontopicssuchas AIEthics,ESG-Sustainability,trainingandawareness.Theoutcomeof thiswide-reachingmonitoringofthelevelofcompliancecultureatAgeas showsthatthefundamentalsareinplaceandsomeareasforimprovement identiedandtranslatedintoanactionplanforthecomingyear(s),whichwill beintegratedintheComplianceYearPlansasrelevant. Training and awareness AspartofitsYearPlan,theCompliancefunctionsetsupawideand continuoustrainingprogrammeforemployeesandmanagement. AllCompliancetrainingsessionsaremandatoryandparticipationinthese sessionsisfollowedupaspartofthereportingtowardsthemanaging bodies.Theobjectiveistoreach100%ofthetargetaudience. Group-wide,thecurriculumistailoredtomeetthetrainingneedsas adequatelyaspossible.Forinstanceintheholdingcompanyaswellasin thesubsidiaries,therearetraininginitiativeslinkedtoaconsistentseriesof topics:ethicsanddeontology,governanceandpolicies,conictsofinterest, corruption,preventionofcriminalactivities,anti-moneylaunderingand counteringterroristnancing,treatingcustomerfairlyandproductapproval process,thirdpartytransactions. Trainingsessionsinvolvetherelevantaudienceintermsofcontents, frequencyandtiming,andthetargetaudiencecanrangefromaselectionof employeesbasedontheirspecicneedsorareasofwork,toallemployees atanylevel. Ineachentity,thereisawelcomeprogrammefornewemployees,who mustattendaninceptionmeetingshortlyuponarrival,atwhichthe complianceobligationsarepresentedandexplained,withanexplicit focusonemployees’obligationsasregardsgovernanceandpolicies, howtodealwithpersonaltransactions,giftsandadvantages,external mandatesorfunctions,andcomplementedwithaseriesoftopicssuchas thewhistleblowingframework,thesuitabilityframework,generalruleson competition,condentiality,assetanddataprotection.Onaregularbasis, awarenessinitiativesarelaunchedwithaviewtomaintainingandupdating employees’knowledgeovertimeoncompliancesubjectsandobligations. Theyareorganisedascompulsoryon-linequizzesaimedatallstaff members. Thetrainingcurriculumisunderconstantscrutinytokeepittforpurpose andupgradedasnecessary.Weakerareasareidentiedsothatthe programmecanbeadjustedaccordingly. In2021,agroup-widetraininginitiativehasbeendeployed.Aprogramme of10interactivemoduleshasbeenorganisedtargetedtoallstaffinthe consolidatedentitiesandinthecorporatecentre.Themodulesfocused onConduct,andmorepreciselyonanti-moneylaundering,countering terroristnancing,giftsandpresents,andexternalsmandates.Thetarget participationwassetat100%asstandard,andtheminimumsuccess thresholdat80%ofthenaltestsofeachmodules. Measuring the effectiveness of our approach Ageasiscontinuouslyreectingonhowtopromoteproperbehaviour andhowtomeasureinitiativesundertaken.Somenewindicatorstotrack progresswereaddedtothedashboardin2021. Within the Compliance department: • Aquarterlyfollow-upofnoticationsisincludedintheComplianceYear Plan.Aqualitativeanalysisisperformed; • Ayearlycompliancequestionnaireissenttoallstaffatyear-endto (re)conrmthenoticationsexecutedintheelapsedyearandthe informationisreconciledwiththequarterlyfollow-up.Onaverage,in 2021only5.5%ofanswers(comparedto7%in2020)requirefurther analysistopreventor/andsettleapossibleissue. AllmonitoringandcontrolactivitiescarriedoutbyCompliancearereported totheExecutiveCommitteeandtheBoardofDirectors,viatheRiskand CapitalCommittee.Thisreportingalsomentionsthenumberofcasesof internalfraudonagroup-widebasis. AttheLegaldepartment: • Onanannualbasis,aquestionnaireissenttoallstafftocollect orconrminformationonmembershipsandontheoccurrenceor involvementinpotentialoreffectiveconictsofinterest,andthe settlementmodalities. SUSTAINABILITYATTHEHEARTOFEVERYTHINGWEDO 63 Ageas Annual Report 2021 Participationratestotrainingsessions 2021 2020 Inceptionmeetings 100% 100% Awarenessinitiatives 90% 90% ComplianceSurveyontheperceptionofthecomplianceculturebystaff 66% Group-wideinteractivemodulesonConduct(Anti-moneylaundering,counteringterroristnancing,conictsofinterest,externalmandates) 95% Successratetogroup-wideinteractivemodulesonConduct 92% YearlyCompliancequestionnaire(controlonpersonaltransactions,giftsandhospitalities,externalmandatesorfunctions) 100% 95% YearlyLegalquestionnaire(membershipsandcollectiononinformationonpotentialconictsofinterest) 90% 100% Breaches Numberofinternalfraudcases 1 2 gurerepresentsonlylast6monthsof2020 Lobbying-memberships(inEUR) 2021 2020 Lobbyingactivities 0.8 0.0 Memberships 5.3 0.3 *scopeislimitedtoageasSA/NV 64 Ageas Annual Report 2021 5.1 Board of Directors The Board of Directors operates within the frameworkdenedbyBelgianlegislation, National Bank of Belgium (NBB) requirements, the Belgian Corporate Governance Code, normal governance practice in Belgium and the Articles of Association. The roles and responsibilities of the Board of Directors and its composition, structure and organisation are described in detail in the Ageas Corporate Governance Charter which is available on the Ageas website. 5.1.1 Composition On31December2021,theBoardofDirectorswascomposedof fourteenmembers,namely:BartDeSmet(Chairman),GuydeSelliers deMoranville(Vice-Chairman),JaneMurphy,RichardJackson,Lucrezia Reichlin,YvonneLangKetterer,KatleenVandeweyer,SonaliChandmal, Jean-MichelChatagny,HansDeCuyper(CEO),ChristopheBoizard(CFO), EmmanuelVanGrimbergen(CRO),FilipCoremans(MDA),AntonioCano (MDE). ThemandatesofLionelPerlandJanZegeringHadderscametoanendin May2021andwerenotrenewed. Jean-MichelChatagnywasappointedasnewmemberoftheBoardof Directorsattheshareholder’sgeneralmeetingof18May2021. ThemandatesofBartDeSmetandKatleenVandeweyerwererenewedat theshareholder’sgeneralmeetingof18May2021.Inlinewiththedecision oftheBoardofDirectorsfollowingthedepartureofJozefDeMeyinOctober 2020,BartDeSmetwasappointedasChairmanoftheBoard. The2020BelgianCodeonCorporateGovernancerequirestheBoard todiscloseintheCorporateGovernanceStatementthereasonswhythe appointmentoftheformerCEOasChairmandoesnothampertherequired autonomyofthenewCEO. TheBoardhascarefullyconsideredthepositiveandnegativeimplicationsof thedecisiontoappointBartDeSmetasChairmanandisconvincedthathis appointmentasChairmanisinthebestinterestoftheGroup. GiventheprolesofBartDeSmetandHansDeCuyperrespectively,the BoardofDirectorsfeelscondentthattheappointmentofBartDeSmet doesnothampertherequiredautonomyofHansDeCuyper.Inanycase, theBoardofDirectorshasexplicitlyaskedBartDeSmettocommithimself tothisandtheBoardeffectivelymonitorsthisonaregularbasis. ThemajorityoftheBoardiscomposedofsevenindependent(asdenedin theBelgianCode2020)non-executivedirectors,sevennon-independent directorsandveoutoffourteendirectorsarefemale. CORPORATEGOVERNANCESTATEMENT Corporate Governance Statement 65 Ageas Annual Report 2021 . 5.1.2 Meetings TheBoardofDirectorsmeteleventimesin2021.Attendancedetailscan befoundinsection5.5BoardofDirectors. In2021,theBoarddealtwith,amongothers,thefollowingmatters: • Thenewstrategycycle2022–2024,Impact24,coveringthestrategy pursuedbyAgeasasawholeandbyeachbusinessoverathree-year period; • TheongoingdevelopmentofeachoftheAgeasbusinesses; • ThepreparationoftheGeneralMeetingsofShareholders; • Theconsolidatedquarterly,semi-annualandannualnancial statements; • The2020AnnualReportandmandatoryreportingtotheNBB (includingtheRSR,SFCR,SOGAandORSAreports); • Pressreleases; • Thebudgetoverthecycle2022-2024; • Dividend,capitalandsolvencymattersofthecompany; • ThesuccessionplanningoftheBoardofDirectorsandoftheExecutive Management; • ThegovernanceandperformanceoftheExecutiveCommitteeand ManagementCommittee; • TheRemunerationPolicy; • Theassessmentoftheindependentcontrolfunctions; • Thesuccessionoftheresponsiblefortheactuarialfunction; • Variousmergerandacquisitionles; • Sustainabilitymatters,includingtheevolutionoftheregulatory landscapeandtheintegrationofsustainabilityinatthecoreofthenew Impact24strategy. TheBoardalsoreceiveddedicatedtrainingsanddeepdiveswithrespectto theupcomingnewIFRSframework(IFRS9and17)andESGmatters. ThemembersoftheExecutiveCommitteereportedontheprogressofthe resultsandthegeneralperformanceofthedifferentbusinessesattheBoard Meetings. 5.1.3 Advisory Board Committees Thetermsofreference,theroleandresponsibilitiesofeachAdvisory BoardCommitteearedescribedintheAgeasCorporateGovernance CharterwhichisavailableontheAgeaswebsite. AttendancedetailsoftheBoardCommitteescanbefoundinsection 5.5BoardofDirectors. 5.1.4TheNominationandCorporateGovernanceCommittee (NCGC) On31December2021,theNominationandCorporateGovernance Committeecomprisedthefollowingmembers:BartDeSmet(Chairman), GuydeSelliersdeMoranville,RichardJackson,YvonneLangKettererand JaneMurphy.TheCEOattendedthemeetings,exceptduringdiscussions relatingtohisownsituation. In2021,theNominationandCorporateGovernanceCommitteemetonfour occasionsincludingonejointmeetingwiththeRemunerationCommittee. Thefollowingmattersweredealtwith: • Thereviewofnewboardcandidatesinviewofthegeneralmeeting 2022; • Thesuccessionplanningofthenon-executiveboardmembers; • ThesuccessionplanningoftheExecutiveManagement; • ThetargetsoftheCEOandtheothermembersoftheExecutive Management; • TheperformanceoftheCEOandtheothermembersoftheExecutive Management; • ThereviewoftheCorporateGovernanceCharterandtheArticlesof Association.Amongstother,thelistofcompetencestobetakeninto accountwhennominatinganewboardmemberwasreviewedandnow explicitlyalsoreferstoexpertise/knowledgeintheeldsofTechnology, ESGmatters,RegulatoryandLegalmatters. TheChairmanoftheNominationandCorporateGovernanceCommittee reportedonthesetopicstotheBoardofDirectorsaftereachmeetingand submittedtheCommittee’srecommendationstotheBoardfornaldecision- making. 66 Ageas Annual Report 2021 5.1.5 The Audit Committee ThecompositionoftheAuditCommitteechangedinthecourseof2021. LucreziaReichlinandKatleenVandeweyerjoinedthecommitteeasnew membersandreplacedJanZegeringHaddersandSonaliChandmal. On31December2021,theAuditCommitteewascomposedofthree independentdirectors:RichardJackson(Chair),LucreziaReichlinand KatleenVandeweyer. NexttotheExecutiveCommitteemembers,theinternalauditorandthe HeadofFinanceandtheexternalauditorsattendedthemeetings.The DirectorofCompliancejoinedthemeetinguntilAugust2021. Basedonnewregulation,theBoarddecidedthattheresponsibleforthe ComplianceFunctionwouldreporttotheRiskandCapitalCommitteeas fromOctober2021andnolongertotheAuditCommittee. TheAuditCommitteemetoneightoccasionsin2021includingonejoint meetingwiththeRiskanCapitalCommittee.Thefollowingmatterswere considered: • Monitoringtheintegrityofquarterly,half-yearlyandannualconsolidated nancialstatements,includingdisclosures,consistentapplicationofor changestothevaluationandaccountingprinciples,consolidationscope, qualityoftheclosingprocessandsignicantissuesraisedbytheCFOor theexternalauditors; • Monitoringthendingsandtherecommendationsoftheinternaland externalauditorsonthequalityofinternalcontrolandaccounting processes; • Reviewingthecompliance,internalandexternalauditplansand reporting; • Reviewingthedesignandoperatingeffectivenessoftheinternalcontrol systemingeneralandoftheriskmanagementsysteminparticular; • ReviewingtheLiabilityAdequacyTestReport;and • TheimplementationofIFRS9and17. DuringthejointmeetingwiththeRiskandCapitalCommittee,themembers discussedthestatusoftheimplementationofIFRS9and17. TheChairoftheAuditCommitteehadquarterlyone-on-onemeetings withtheinternalandexternalauditors.Hereportedontheoutcomeofthe committee’sdeliberationstotheBoardofDirectorsaftereachmeetingand presentedtherecommendationsoftheAuditCommitteetotheBoardfor decision-making. 5.1.6TheRemunerationCommittee Inthecourseof2021,LionelPerlwasreplacedbySonaliChandmal. GuydeSelliersdeMoranvillealsojoinedtheRemunerationCommittee. On31December2021,theRemunerationCommitteecomprisedthe followingmembers:JaneMurphy(Chair),SonaliChandmal,Katleen VandeweyerandGuydeSelliersdeMoranville. TheRemunerationCommitteeisassistedbyWillisTowersWatson,an externalprofessionalservicescompanythatprovidesmarketinformation andadviceoncommonlyappliedrewardelements,bestpracticesand expecteddevelopments.WillisTowersWatsondoesnotprovidematerial compensationnorbenets-relatedservicestotheExecutiveCommitteeof Ageas,ortoanyotherpartoftheAgeasorganisation. TheCEOandtheGroupHumanResourcesDirectorattendedthemeetings, apartfromdiscussionsrelatingtothemselves. TheRemunerationCommitteemetonthreeoccasionsincludingonejoint meetingwiththeNominationandCorporateGovernanceCommittee. In2021,theRemunerationCommitteediscussedandsubmitted recommendationstotheBoardofDirectorson: • Thebenchmarkingandreviewoftheremunerationofthemembers oftheManagementandExecutiveCommitteeagainstcurrentmarket practices; • ThedisclosureoftheremunerationofBoardandExecutiveCommittee MembersinthenotestotheAnnualConsolidatedFinancialStatements; • ThereportoftheRemunerationCommitteeasincludedintheCorporate GovernanceStatement; • Thefeedbackontheshareholder’svoteontheRemunerationReport; • Theshare-linkedincentiveplaninfavourofseniormanagement; • TheremunerationofthenewlycreatedfunctionCDSO. InthejointmeetingswiththeNominationandCorporateGovernance Committee,thefollowingtopicswerediscussedandsubmittedtotheBoard ofDirectorsforvalidation: • Theindividualtargets(quantitativeandqualitative)forthemembersof theManagementandExecutiveCommittee; • ThetargetsforthebusinessKPIs; • ThespecicKPIsfortheChiefRiskOfcer;(see5.7.6formoredetails onthespecicKPIs.); • Theassessmentoftheresultsontheindividualobjectivesandthe businessKPIs; • TheindividualShort-termincentive(STI)andLong-termincentive(LTI) ofthemembersoftheManagementandExecutiveCommitteebasedon theaboveassessment. TheChairoftheRemunerationCommitteereportedontheaforementioned matterstotheBoardofDirectorsaftereachmeetingandadvisedthe Boardondecision-makingwhenrequired.Furtherinformationonthe RemunerationCommitteecanbefoundintheReportoftheRemuneration Committee(seesection5.7ofthischapter). CORPORATEGOVERNANCESTATEMENT 67 Ageas Annual Report 2021 5.1.7 The Risk and Capital Committee (RCC) Inthecourseof2021,Jean-MichelChatagnyreplacedLucreziaReichlin asmemberoftheRiskandCapitalCommittee.On31December2021,the Risk&CapitalCommitteecomprisedthefollowingmembers:YvonneLang Ketterer(Chair),GuydeSelliersdeMoranvilleandJean-MichelChatagny. TheRiskandCapitalCommitteemetoneightoccasionsincludingonejoint meetingwiththeAuditCommittee.Themeetingswereattendedbythe membersoftheExecutiveCommittee. ThemattersdiscussedintheRiskandCapitalCommitteein2021included: • Monitoringofriskmanagement,basedonreportsbymanagement; • Monitoringonaquarterlybasistheperformanceoftheasset managementbysegmentandbyassetclass; • Reviewingtheriskpoliciespreparedbymanagement,includingthe reviewoftheInformationSecuritypolicyandtheEnvironmentalpolicy; • MonitoringofthecapitalallocationandthesolvencyoftheAgeasGroup; • Monitoringofthekeyrisksandemergingrisks; • Thebusinessrisks,withdedicatedsessionspersegmentandtothe reinsurancebusiness; • TheInformationSecurityreport; • TheActuarialFunctionsreports;and • SolvencyIImodelchanges. InthecontextofthenewstrategicplanImpact24,specialattentionhasbeen giventothenon-nancialindicators,includingthesustainabilitytargets. NexttotheExecutiveCommitteemembersandinternalriskexperts,the DirectorofCompliancejoinedthemeeting,asfromAugust2021following newregulation. TheChairoftheRiskandCapitalCommitteereportedonthe aforementionedmatterstotheBoardofDirectorsaftereachmeetingand advisedtheBoardondecision-makingwhenrequired. DuringthejointmeetingwiththeAuditCommittee,themembersdiscussed thestatusofimplementationofIFRS9and17. 5.2 Executive management Ageas’sexecutivemanagementiscomposedofthemembersofthe ExecutiveCommitteeandthemembersoftheManagementCommittee. TheroleoftheexecutivemanagementistomanageAgeasinlinewiththe values,strategies,policies,plansandbudgetsendorsedbytheBoard. AllmembersoftheExecutiveCommitteearememberoftheBoardof Directors.TheCEOchairstheExecutiveCommittee,whichmeetsoncea weekaccordingtoapredeterminedtimetable.Furthermeetingsareheld whenevernecessary. ThecompositionoftheExecutiveCommitteedidnotchangein2021. Attheendof2021,theExecutiveCommitteeofAgeaswascomposedof: • HansDeCuyper,CEO,responsiblefortheStrategy,M&A,Audit,Human Resources,CommunicationsandCompanySecretary; • ChristopheBoizard,CFO,responsibleforFinance,Investments,Investor Relations,BusinessPerformanceManagementandLegal&Tax; • EmmanuelVanGrimbergen,CRO,responsibleforRisk,Compliance, ActuarialfunctionandValidation; • AntonioCano,MDEurope,responsibleformonitoringofthe performanceofthebusinessinEurope,forreinsuranceandforproperty investmentswithintheGroup; • FilipCoremans,MDAsia,responsibleforthemonitoringofthe performanceofthebusinessinAsiaandfortheactivitiesunderthe CDSOofce,includingBusiness&TechnologyDevelopmentandESG matterswithintheGroup. Attheendof2021,theManagementCommitteewascomposedof: • ThevemembersoftheExecutiveCommittee; • TheChiefDevelopmentandSustainabilityOfcer,GilkeEeckhoudt; • Theheadsofthefourbusinesssegments:HeidiDelobelle, CEOBelgium,StevenBraekeveldt,CEOPortugal,AntMiddle,CEO UnitedKingdom,andGaryCrist,CEOAsia. 68 Ageas Annual Report 2021 5.3 Internal Risk Management Withregardtotheriskmanagementandinternalcontrolsystem,the Boardapprovesappropriateframeworksforriskmanagementandcontrol. Tothisend,AgeashasputinplaceaGroup-widekeyriskreportingprocess toidentifykey(existingandemerging)risksthatcouldimpacttherealisation ofitsobjectives.Italsoassessesthecontrolframeworkinplacetoensure thattheserisksaremanagedonanongoingbasis.Theseriskandcontrol activitiesarecontinuouslyexercisedbytheBoardofDirectors,Management andallemployeesinordertoprovidereasonableassuranceof: • Theeffectivenessandefciencyofoperations; • Qualitativeinformation; • Compliancewithlawsandregulations,andwithinternalpoliciesand procedureswithrespecttotheconductofbusiness; • Safeguardingofassetsandidenticationandmanagementofliabilities; • Achievementofcompany’sobjectiveswhileimplementingthecompany’s strategy. Fordetailedinformationontheinternalcontrolframework,pleasereferto note4RiskManagementintheAgeasGeneralNotes. 5.4 Corporate Governance references and Diversity 5.4.1 CorporateGovernancereferences TheBelgianCorporateGovernanceCodeisbasedonthe‘complyor explain’concept,whichmeansthatifacompanychoosestodeviatefrom anyoftheCode’sprinciples,itmustexplainitsreasonsfordoingsointhe CorporateGovernanceStatement. Asmentionedunderpoint5.1.1.,themandateofBartDeSmetwasrenewed attheShareholder’sGeneralMeetingof18May2021.Inlinewiththe decisionoftheBoardofDirectorsfollowingthedepartureofJozefDeMeyin October2020,BartDeSmetwasappointedasChairmanoftheBoard. The2020BelgianCodeonCorporateGovernancerequirestheBoard ofDirectorstodiscloseintheCorporateGovernanceStatementwhythe appointmentoftheformerCEOasChairmandoesnothampertherequired autonomyofthenewCEO. TheBoardhascarefullyconsideredthepositiveandnegativeimplicationsof thedecisiontoappointBartDeSmetasChairmanandisconvincedthatthe positiveisvastandthat,hisappointmentasChairmanisinthebestinterest oftheGroup. GiventheproleofBartDeSmetandHansDeCuyperrespectively,the BoardfeelscondentthattheappointmentofBartDeSmetdoesnot hampertherequiredautonomyofHansDeCuyper.Inanycase,theBoard hasexplicitlyaskedBartDeSmettocommithimselftothisandtheBoard effectivelymonitorsthis. CORPORATEGOVERNANCESTATEMENT 69 Ageas Annual Report 2021 5.4.2Diversity TheDiversityPolicyappliestoallseniormanagersandmembersofthe BoardofDirectorsacrossthegroup: • AgeasiscommittedtoattractingandretainingaBoardofDirectors whosecompositionreectsadiversityofbackgrounds,knowledge, experienceandabilities; • AppointmentstotheBoardwillbebasedonmerit,howeveritwillalso considerissuesofdiversityandthemixofskillsrequiredtobestachieve Ageas’sstrategy; • Applythelegallyrequiredminimumof33%oftheoppositegenderinthe AgeasBoard. Asper31December2021,theAgeasBoardwascomposedoffourmale Non–ExecutivedirectorsandvefemaleNon–Executivedirectorsnextto vemaleExecutivedirectors.IntermsofnationalitytheBoardiscomposed ofsixdirectorsofBelgiannationality,onedirectorofDutchnationality, onedirectorofItaliannationality,onedirectorofFrenchnationality, twodirectorsofSwissnationality,onedirectorofBelgian-Canadian nationality,onedirectorofBritishnationalityandonedirectorofIndian nationality.InthecompositionoftheBoard,Ageasensuresthediversityin termsofcompetencesandexpertiseinordertoobtainawell-balancedand awell-foundeddecisionprocess. TheAgeasExecutiveCommitteewascomposedofvemalemembers ofwhichthreeofBelgiannationality,oneofFrenchnationalityandoneof Dutchnationality.Specicattentionisgiventodiversityintermsof successionplanningduringtheyearlyupdatetotheBoardofDirectors. OveralltheseniormanagementpopulationatAgeasGrouplevelconsistsof 73%maleseniormanagersand27%femaleseniormanagers. 5.4.3.BoardAssessment Inlinewiththe2020BelgianCodeonCorporateGovernance,the BoardofDirectorsdecidedtocallupontheindependenceandexpertiseof GUBERNAtoperformaformalexternalevaluationexercise,basedona writtenquestionnairecomplementedwithindividualinterviewswithallboard members.GUBERNA’sapproachistoprovideageaswithclearinsights inthecurrenteffectivenessofitsboardbyidentifyingthestrengthsand challenges.Buildingoncorporategovernancebestpractices,theseinsights weresubsequentlytranslatedintospecicrecommendationsfocusedat furthermaximisingtheboard’saddedvalueforitsshareholders,executive committee,andmoregenerallythecompany.Thereportincludesthemain ndingsaswellasamoredetailedanalysisoftheinformationretrievedfrom theinterviewsandquestionnaires. Theoverallconclusionwasthefollowing(extractoftheGUBERNAreport issuedinMay2021). In recent history, the board of ageas has witnessed as well as instigated a number of changes. After Connect21, the new strategic plan Impact24 is being nalized for launch. Globally, the new reinsurance branch is being developed further, which means that the focus of ageas’ business is broadened. Focusing on changes within the board itself, an important transition has taken place with the ex-CEO taking up the position of chairman, and the CEO of the Belgian subsidiary (AG Insurance) becoming the CEO of ageas. In the near future, two board members with a long track record are leaving and two new proles are going to bring their own specic skills and network. The board is still in the process of adapting to the new situation, while simultaneously preparing for new challenges ahead. This board assessment takes this context of change and recent transition into account and aims to give a snapshot of the board right now, as it functions within this time frame. Ageas’ governance structure is quite mature and to a large extent compliant with the prevailing corporate governance requirements. Ageas’ Corporate Governance Charter, that is frequently updated (most recently in 2019), is an extensive document that touches upon all formal aspects of governance. The numbers below summarises the answers of the surveyed directors to the question “Howwouldyouevaluatethecurrentaddedvalueoftheboard?”. The majority of directors assesses the added value as “very good”, which indicates a very high level of appreciation. • Good : 2 • Very Good : 2 • Excellent : 11 Overall, there is a consensus among the respondents that the board of directors of ageas performs very well, both in the implementation of its roles and tasks and in its functioning. Nevertheless, some points of particular interest were brought forward. Governance is indeed a dynamic matter that evolves over time to arm the company and its decision-making bodies against the challenges it is confronted with. In particular, there is no “one size ts all” framework for good governance. The implementation of governance principles requires the necessary exibility and modulation according to the particularities, culture and context of the company concerned (the so called “substance over form” approach). This rational is key in GUBERNA’s board evaluation methodology which focuses on the creation of added value by the board of directors. Richerd Jackson ChairAC YvonneLangKetterer Chair RCC KatleenVandeweyer Member Sonali Chandmal Member Emmanuel Van Grimbergen CRO Filip Coremans MDAsia Christophe Boizard CFO Antonio Cano MDEurope Bart De Smet ChairIChairCGC Hans De Cuyper CEO Jane Murphy Chair RemCo LucreziaReichlin Member Guy de Selliers de Moranville ViceChairman Jean-Michel Chatagny Member 70 Ageas Annual Report 2021 5.5 Board of Directors CORPORATEGOVERNANCESTATEMENT 71 Ageas Annual Report 2021 Chairman Bart De Smet • 1957–Belgian–Male • On31December2021:ChairmanoftheBoardofDirectorsand ChairmanoftheNominationandCorporateGovernanceCommittee. • Firstappointedin2009.TermrunsuntilAnnualGeneralMeetingof Shareholdersin2025. Non-ExecutiveBoardMembers Guy de Selliers de Moranville • 1952–Belgian–Male • On31December2021,ViceChairmanoftheBoardofDirectors, MemberoftheRisk&CapitalCommittee,MemberoftheNomination andCorporateGovernanceCommitteeandMemberofthe RemunerationCommittee. • Firstappointedin2009.TermrunsuntilAnnualGeneralMeetingof Shareholdersin2023. Richard Jackson • 1956–British–Independent–Male • On31December2021,MemberoftheBoardofDirectorsandChairman oftheAuditCommitteeandMemberoftheNominationandCorporate GovernanceCommittee. • Firstappointedin2013.TermrunsuntilAnnualGeneralMeetingof Shareholdersin2024. Jane Murphy • 1967–Belgian/Canadian–Independent–Female • On31December2021,MemberoftheBoardofDirectors,Chairwoman oftheRemunerationCommitteeandMemberoftheNominationand CorporateGovernanceCommittee. • Firstappointedin2013.TermrunsuntilAnnualGeneralMeetingof Shareholdersin2024. YvonneLangKetterer • 1965–Swiss–Independent–Female • On31December2021,MemberoftheBoardofDirectors,Chairwoman oftheRisk&CapitalCommitteeandMemberoftheNominationand CorporateGovernanceCommittee. • Firstappointedin2016.TermrunsuntilAnnualGeneralMeetingof Shareholdersin2024. LucreziaReichlin • 1954–Italian–Independent–Female • On31December2021,MemberoftheBoardofDirectorsandMember oftheAuditCommittee. • Firstappointedin2013.TermrunsuntilAnnualGeneralMeetingof Shareholdersin2024. Sonali Chandmal • 1968–Belgian/Indian–Independent–Female • On31December2021,MemberoftheBoardofDirectorsandMember oftheRemunerationCommittee. • Firstappointedin2018.TermrunsuntilAnnualGeneralMeetingof Shareholdersin2022. KatleenVandeweyer • 1969–Belgian–Independent–Female • On31December2021,MemberoftheBoardofDirectors,Memberof theRemunerationCommitteeandMemberoftheAuditCommittee. • Firstappointedin2017.TermrunsuntilAnnualGeneralMeetingof Shareholdersin2025. Jean-Michel Chatagny • 1959–Swiss–Independent–Male • On31December2021,MemberoftheBoardofDirectorsandMember oftheRiskandCapitalCommittee. • Firstappointedin2021.TermrunsuntilAnnualGeneralMeetingof Shareholdersin2025. Emmanuel Van Grimbergen CRO Filip Coremans MDAsia Christophe Boizard CFO Antonio Cano MDEurope Hans De Cuyper CEO 72 Ageas Annual Report 2021 MembersoftheExecutiveCommittee ExecutiveBoardMembers Hans De Cuyper • 1969–Belgian–Executive–Male • ChiefExecutiveOfcer • Firstappointedin2020.TermasBoardmemberrunsuntilAnnual GeneralMeetingofShareholdersin2024. Christophe Boizard • 1959–French–Executive–Male • ChiefFinancialOfcer • FirstappointedasBoardmemberin2015.TermasBoardmemberruns untilAnnualGeneralMeetingofShareholdersin2023. Filip Coremans • 1964–Belgian–Executive–Male • ManagingDirectorAsia • FirstappointedasBoardmemberin2015.TermasBoardmemberruns untilAnnualGeneralMeetingofShareholdersin2023. Antonio Cano • 1963–Dutch–Executive–Male • ManagingDirectorEurope • FirstappointedasBoardmemberin2016.TermasBoardmemberruns untilAnnualGeneralMeetingofShareholdersin2024. Emmanuel Van Grimbergen • 1968–Belgian–Executive–Male • ChiefRiskOfcer • FirstappointedasBoardmemberin2019.TermasBoardmemberruns untilAnnualGeneralMeetingofShareholdersin2023. Valérie Van Zeveren • CompanySecretary AfulloverviewofourBoard,ManagementandExecutiveCommittee members’proles(includingotherpositionsheld)canbefoundonthe Management-section of Ageas’s corporate website. CORPORATEGOVERNANCESTATEMENT 73 Ageas Annual Report 2021 Attendance at Board and Committee meetings AttendanceatthemeetingsoftheBoard,AuditCommittee,Risk&CapitalCommittee,RemunerationCommitteeandNominationandCorporateGovernance Committeewasasfollows: Audit CorporateGovernance Remuneration Risk&Capital Boardmeetings* Committee meetings Committee meetings Committee meetings Committee meetings Name Held Attended Held* Attended Held Attended Held Attended Held Attended HansDeCuyper 12 12 (100%) AntonioCano 12 12 (100%) ChristopheBoizard 12 12 (100%) EmmanuelVanGrimbergen 12 12 (100%) FilipCoremans 12 12 (100%) BartDeSmet 12 12 (100%) 3 3 GuydeSelliersdeMoranville 12 12 (100%) 3 3 1 1 8 8 JanZegeringHadders 6 6 (100%) 3 3 Jane Murphy 12 12 (100%) 3 3 3 3 KatleenVandeweyer* 12 10 (92%) 4 3 3 3 LionelPerl 6 6 (100%) 2 2 LucreziaReichlin* 12 11 (92%) 4 4 3 3 RichardJackson 12 12 (100%) 7 7 3 3 SonaliChandmal 12 12 (100%) 3 3 1 1 YvonneLangKetterer 12 12 (100%) 3 3 8 8 New Board member as per May 2021 (held meetings are since the General Meeting) Jean-MichelChatagny 8 8 (100%) 5 5 IncludingthejointmeetingRCC/AC. IncludingthejointmeetingsRC/NCGC.Allnon-executiveBoardmembersattendedthejointmeeting ThemandatesofMr.PerlandMr.ZegeringHadderscametoanendinMay2021 Mr.deSelliersjoinedtheRemunerationCommitteeinJune2021 Mrs.ReichlinlefttheRiskandCapitalCommitteeandjoinedtheAuditCommitteeinJune2021 Mrs.ChandmallefttheAuditCommitteeandjoinedtheRemunerationCommitteeinJune2021 *Mrs.VandeweyerjoinedtheAuditCommitteeinJune2021 *ThetotalnumberofmeetingsincludestheattendanceatthegeneralmeetingofMay2021 NotethatthemembersoftheExecutiveCommitteeattendedthecommitteemeetingsasinviteesandnotasmembers.Hencetheirattendanceisnotindicatedin thetable. 74 Ageas Annual Report 2021 5.6 Consolidated information related to the implementation of the EU Takeover Directive and the Ageas Annual Report For legal purposes, the Board of Directors hereby declares that the Ageas Annual Report 2021 has been prepared in accordance with the statutory rules implementing the EU Takeover Directive that came into force in Belgium on 1 January 2008. The Board hereby gives thefollowingexplanationsconcerningthe respective elements to be addressed under these rules: • Comprehensiveinformationontheprevailingcapitalstructurecan befoundinnote18Shareholders’equityandnote20Subordinated liabilitiesintheAgeasConsolidatedFinancialStatements2021; • Restrictionsonthetransferofsharesextendonlytopreferenceshares (ifissued)andthesecuritiesdescribedinnote20Subordinatedliabilities intheAgeasConsolidatedFinancialStatements2021; • Ageaslistsinnote1LegalstructureoftheConsolidatedFinancial Statementsaswellasundertheheading‘Specicationsofequity– Shareholderstructureofthecompanyatthebalancesheetdate’inthe ageasSA/NVCompanyFinancialStatementsanymajorshareholdings of(third)partiesthatexceedthethresholdlaiddownbylawinBelgium andbytheArticlesofAssociationofageasSA/NV; • Nospecialrightsareattachedtoissuedsharesotherthanthose mentionedinnote18Shareholders’equityandnote20Subordinated liabilitiesintheAgeasConsolidatedFinancialStatements2021; • Shareoptionandsharepurchaseplans,ifany,areoutlinedinnote6 section6.2Employeeshareandshare-linkedincentiveplansinthe AgeasConsolidatedFinancialStatements2021.TheBoardofDirectors decidesontheissuanceofshareplansandoptions,asapplicable, subjecttolocallegalconstraints; • Exceptfortheinformationprovidedinnote18Shareholders’equity, note7Relatedpartiesandnote20SubordinatedliabilitiesintheAgeas ConsolidatedFinancialStatements2021,Ageasisunawareofany agreementbetweenshareholdersthatmayrestricteitherthetransferof sharesortheexerciseofvotingrights; • BoardMembersareelectedorremovedbyamajorityofvotescastatthe GeneralMeetingofShareholdersofageasSA/NV.Anyamendmentto theArticlesofAssociationrequirestheGeneralMeetingofShareholders topassaresolutiontothateffect.Iffewerthan50%oftheshareholders arerepresented,asecondmeetingmustbeconvened,whichwillbe abletoadopttheresolutionwith75%ofthevoteswithoutanyneedfor attendancequorum; • TheAgeasBoardisentitledbothtoissueandtobuybackshares,in accordancewithauthorisationsgrantedbytheGeneralMeetingof ShareholdersofageasSA/NV.Thecurrentauthorisationwithregardto thesharesofageasSA/NVwillexpireon16June2023; • ageasSA/NVisnotadirectpartytoanymajoragreementthatwould eitherbecomeeffective,beamendedand/orbeterminatedduetoany changeofcontroloverthecompanyasaresultofapublictakeoverbid. However,certainofitssubsidiariesaresubjecttosuchclausesincase ofadirectand/orindirectchangeofcontrol; • ageasSA/NVhasnotenteredintoanyagreementwithitsBoard Membersoremployees,whichwouldallowthedisbursementofspecial severancepayinthecaseofterminationofemploymentasaresultofa publictakeoverbid; • Neitherdifferentshareclassesnoranypreferentialshareshave beenissued.AdditionalinformationonAgeassharesissetoutin note18Shareholders’equityoftheConsolidatedFinancialStatements; • Ageasshareholdersareunderanobligationtomeetcertainnotication requirementswhentheirshareholdingexceedsordropsbelowcertain thresholds,asprescribedbyBelgianlegislationandbytheArticlesof AssociationofageasSA/NV.ShareholdersmustnotifytheCompanyas wellastheFSMAwhentheirshareholdingexceedsordropsbelow3% or5%ofthevotingrightsoranymultipleof5%.Ageaspublishessuch informationonitswebsite. CORPORATEGOVERNANCESTATEMENT 75 Ageas Annual Report 2021 5.7 Report of the Remuneration Committee DearShareholder,onbehalfoftheRemunerationCommitteeIam pleasedtopresentyouwithourRemunerationReportfor2021.Bywayof introduction,Iwouldliketohighlightsomeimportanteventswhichmarked 2021: • 2021markedthelastyearofourConnect21-planwhichinspiteofthe challengingconditionsoftheCovid-19pandemicwascompletedvery successfully.Weachievedallnancialtargetsandimportantprogress wasmadeforourstakeholdersandsustainabilitymetrics. • Thenewstrategicplanfortheperiod2022-2024,Impact24wasprepared andlaunchedin2021.Theplansetsclearnancialambitionsforour corebusiness,forournewenginesofgrowthandputsastillstronger focusonsustainabilitywhichwillbeclearlycascadedinourperformance KPIs.Theincreasingattentionforcapitalmanagementobjectiveswill bereectedinournancialKPIs.Inthiscontextwealsodiscussedsome upcomingchangesinanticipationofIFRS9/17andC-ROSS2. • InsupportoftheimplementationoftheImpact24planandtoreinforce oursustainabilityapproachtheBoarddecidedtoenlargethe ManagementCommitteewithaChiefDevelopmentandSustainability Ofcer(CDSO).GilkeEeckhoudtwasappointedCDSOAgeasasof1 September2021. • Westronglyvaluedialoguewithandfeedbackfromourshareholders. Followinglastyear’sGeneralMeetingofShareholders,wecontacted aselectionofourShareholderstoobtainmorein-depthfeedbackon theirvoteontheRemunerationreport2020.Followingthisfeedback,we includedamoredetailedviewontheachievementofthenon-nancial andnancialKPIsandtheirimpactonvariableremuneration.Wealso conductedabenchmarkingexerciseonthevestingconditionsofthe Long-TermIncentive(LTI)-plan. • TheCovid-19pandemicremainedagainin2021atthecentreof attentionrequiringclosemonitoringofourremunerationpracticesinline withtheguidelinesoftheregulatoryauthorities. InthisRemunerationReportwelookbackon2021andwereporton Ageas’sperformanceandonhowitimpactedExecutiveRemuneration. TheRemunerationReportincludesasummaryofourBoardofDirectorsand ExecutiveManagementRemunerationPolicyandprovidesatransparent disclosureoftheremunerationoftheBoardofDirectorsandExecutive managementincludingvariableandshare-basedremuneration. IinviteyoutoreadthisRemunerationReporttogetherwithchapter 6.3RemunerationoftheBoardofDirectorsandtheExecutive Committee Members of the annual report,whichisanintegralpartofthe RemunerationReport. InthisRemunerationReportyouwillndaconrmationoftheobjectives ofourRemunerationPolicyandanoverviewofthemaintopicsthatwe discussedintheRemunerationCommitteeduring2021.Asinthepastwe consistentlyimplementedthepolicyregardingtheremunerationoftheBoard ofDirectorsandtheExecutiveCommittee. IlookforwardtopresentingourRemunerationReportattheGeneral MeetingofShareholderson18May2022. Jane Murphy Chair of the Remuneration Committee 29March2022 76 Ageas Annual Report 2021 5.7.1 The Remuneration Committee TheRemunerationCommitteeconsistsofJaneMurphy(Chair),Katleen Vandeweyer,SonaliChandmalandGuydeSelliers.LionelPerlstepped downasMemberoftheRemunerationCommitteefollowingtheGeneral MeetingofShareholdersinMay2021.SonaliChandmalandGuyde SelliersbecameamemberoftheRemunerationCommitteeasofthatsame day.Thecommitteeheld3meetingsincludingonejointmeetingwiththe CorporateGovernanceCommitteeduringtheyearunderreview.TheCEO andtheGroupHRDirectorattendedthemeetingsoftheRemuneration Committee,exceptformattersrelatingtothemselves.Attendancedetails canbefoundinsection4.5BoardofDirectors. TheRemunerationCommitteeisassistedbyWillisTowersWatson,an externalprofessionalservicescompany.WillisTowersWatsondoesnot providematerialcompensationorbenets-relatedservicestotheExecutive CommitteeofAgeas,ortoanyotherpartoftheAgeasorganisation. 5.7.2KeyobjectivesofourRemunerationPolicy Thekeyobjectivesofourpolicyaretoensuremarketcompetitiveness, observesoundprinciplesofriskmanagement,providefulltransparencyon remunerationandguaranteecompliancewithexistingandupcomingBelgian legislationandEuropeanregulations. Market competitiveness TheremunerationofboththeBoardofDirectorsandoftheExecutive Committee is intended: • torewardfairlyandcompetitivelyensuringtheorganisation’sabilityto attract,motivateandretainkeytalentinaninternationalmarketplace; • todifferentiaterewardbyperformanceandrecognisesustained(over) achievementofperformanceagainstpre-agreed,objectivegoalsatthe corporate,operatingcompanyandindividuallevel; • topursuelong-termvaluecreationandalignmentwithstakeholders’ interests. Sound risk management Theremunerationpolicyincludesguidelines: • toobservesoundprinciplesofcorporategovernance,ofresponsible businessconductandcompliancewithlegalrequirements; • toobtainaremunerationpracticethatcontributestosoundrisk managementanddoesnotleadtorisk-takingthatexceedstherisk tolerancelimitsofAgeas. Transparency TheBoardofDirectorswillsubmitforapprovaltotheGeneralMeeting ofShareholderstheyearlyRemunerationReport,providingdetailedinsights intotheworkoftheRemunerationCommitteeandtheremunerationpractice forthenancialyearinscope.TheBoardofDirectorswillsubmitthe RemunerationPolicyforapprovaltotheGeneralMeetingofShareholdersat anymaterialupdateandatleastevery4years. Compliance with existing and upcoming legislation Ageasiscloselymonitoringexistingandupcominglegislationand anticipateschangeswhenappropriate.TheAgeasRemunerationPolicy andRemunerationReportaredraftedbytakingintoaccount,theSolvency IIDirective,theEUShareholderRights’DirectiveII,itsimplementationin Belgianlegislation,theBelgianCorporateGovernanceCodeof2020and theupdatedCircularNBB2016_31(ontheexpectationsoftheNational BankofBelgiumregardingthegovernancesystemfortheinsuranceand reinsurancesector). 5.7.3 What did we discuss in 2021? In2021theCommitteediscussedandsubmittedrecommendationsto theBoardofDirectorson: • Theshare-linkedincentiveplaninfavourofseniormanagement; • Theguidelinesoftheregulatoryauthoritiesonvariableremunerationin thecontextoftheCovid–19pandemic; • ThedisclosureoftheremunerationofBoardandExecutiveCommittee MembersinthenotestotheAnnualConsolidatedFinancialStatements; • ThereportoftheRemunerationCommitteeasincludedintheCorporate GovernanceStatement; • ThecompensationofthenewlyappointedChiefdevelopmentand sustainabilityofcer(CDSO); • Thebenchmarkingandreviewoftheremunerationofthemembers oftheManagementandExecutiveCommitteeagainstcurrentmarket practices; • Thefeedbackontheshareholder’svoteontheRemunerationReport; • TheLTB-schemeforseniormanagementintheUKinthecontextofthe reviewofthepensioncontribution; • AfeedbackofthenewlyinstalledRemunerationCommitteeinAgeas Portugal. InthejointmeetingwiththeextendedNominationandCorporate GovernanceCommittee,thefollowingtopicswerediscussedandsubmitted totheBoardofDirectorsforvalidation: • Theindividualtargets(quantitativeandqualitative)forthemembersof theManagementandExecutiveCommittee; • ThetargetsforthebusinessKPIs; • ThespecicKPIsfortheChiefRiskOfcer;(see5.7.6formoredetails onthespecicKPIs); • Theassessmentoftheresultsontheindividualobjectivesandthe businessKPIs; • TheindividualShort-termincentive(STI)andLong-termincentive(LTI) ofthemembersoftheManagementandExecutiveCommitteebasedon theaboveassessments. CORPORATEGOVERNANCESTATEMENT 77 Ageas Annual Report 2021 5.7.4Policyimplementationin2021 Board of Directors RemunerationoftheBoardofDirectorsconsistsofaxedannual remunerationandanattendancefee.Since2018,thexedannual remunerationamountstoEUR120,000fortheChairmanandEUR60,000 fortheotherNon-ExecutiveBoardMembers.Non-ExecutiveBoard MembersreceiveanattendancefeeofEUR2,000perBoardMeetingand EUR1,500perBoardCommitteeMeeting.FortheChairmanoftheBoard ofDirectorsandtheBoardCommittees,therespectiveattendancefeesare setatEUR2,500perBoardMeetingandEUR2,000perBoardCommittee Meeting.Nochangeswereproposedtotheseamountsfor2021. Inlinewithprinciple7.6ofthenewBelgianCorporateGovernanceCode 2020,Non-ExecutiveBoardmemberswillreceiveuptoamaximumof20% oftheirxedremunerationintheformofAgeasshares.Thisprinciplewillbe appliedasofanyfutureincreaseofBoardremuneration. Executive Committee changes TherewerenochangesintheExcoduring2021. 5.7.5 Total and Share based Remuneration Board of Directors TotalremunerationofNon-ExecutiveBoardMembersamountedto EUR1.48millioninthe2021nancialyear(2020:EUR1.77million).The decreaseisexplainedbyalowernumberofBoardandBoardCommittee meetingsincomparisonto2020.Thisremunerationincludesthebasic remunerationforBoardMembershipandtheattendancefeesforBoard MeetingsandBoardCommitteemeetingsbothatthelevelofAgeasandat itssubsidiaries.FordetailedindividualinformationonBoardRemuneration werefertonoteC.6.3.1oftheannualreport. Executive Remuneration In2021,thetotalremunerationincludingpensioncontributionsand fringebenetsoftheExecutiveCommitteeamountedtoEUR7,197,532 comparedtoEUR7,749,540in2020.Fordetailedindividualinformationon ExecutiveRemunerationwerefertonoteC.6.3.2oftheannualreport. HansDeCuyper CEO ExecutiveCommittee2021TotalRemuneration EUR2,000,000 EUR1,500,000 EUR1,000,000 EUR500,000 ChristopheBoizard CFO AntonioCano MDEurope FilipCoremans MDAsia EmmanuelVanGrimbergen CRO PensionExpenses VariableRemuneration FixedRemuneration 78 Ageas Annual Report 2021 5.7.6Compliancewithpolicyandapplicationofperformance criteria One-year variable remuneration (STI) Allvariableremunerationinrelationto2021performancewas determinedinlinewiththeRemunerationPolicy.Theone-yearvariable remuneration(STI)fortheExecutiveCommitteeMembersisdeterminedby referencetotheachievementofindividualperformancecriteria(weight30%) andcompanyperformancecriteria(weight70%).Individualperformance ismeasuredonspecicstrategicactionsandonanassessmentagainst thecriteriaoftheAgeasleadershipframework.Thecompanyperformance criteriaconsistofbothnancialKPIandstakeholderrelatedKPIs.Forthe CROspeciccriteriarelatedtotheriskfunctionapply.Thetablebelowgives anoverviewofthekeyperformanceindicators,theirrespectiveweightand thelevelofachievementasassessedbytheBoardofDirectors. Theoverallachievementresultedinthefollowingpay-outsofthetargetSTI forperformanceyear2021: • HansDeCuyper(CEO): 120%oftarget; • ChristopheBoizard(CFO): 116%oftarget; • EmmanuelVanGrimbergen(CRO):117%oftarget; • AntonioCano(MDEurope): 118%oftarget; • FilipCoremans(MDAsia): 120%oftarget. YouwillndbelowadetailedoverviewofallKPIs,theirweight,threshold,targets,maximum,actualsandtherelatedpay-outoftheSTI. IncumbentName AgeasPerformance Score(1) Weight Individual Performance Score Weight RiskPerfor- manceScore Weight TotalPerfor- manceScore HansDeCuyper 116% 70% 129% 30% na 0% 120% ChristopheBoizard 116% 70% 115% 30% na 0% 116% EmmanuelVanGrimbergen(2) 116% 40% 121% 30% 115% 30% 117% AntonioCano 116% 70% 122% 30% na 0% 118% FilipCoremans 116% 70% 129% 30% na 0% 120% (1)DetailofAgeasBusinessScore:pleaseseedetailbelow (2)FortheCROtheAgeasBusinessperformanceweighsfor40%,theadditional30%islinkedtotheperformanceoftheRiskFunctionwhichscores115% Theindividualperformancescoreweighingfor30%includesanindividual assessmentbasedontheAgeasLeadershipframework.Thisframework denes11leadershipbehaviorslinkedtotheAgeasvalues‘Care’,‘Dare’, ‘Share’and’Deliver’,rolemodelingtheexpectedbehaviorsforAgeas leaders.Thescoringforthiscomponentisbasedonaself-assessment,the inputfromthepeerreview,theinputfromtheCEOfortheExCo–members andfromtheChairmanfortheCEO.Thenalscoreisassignedfollowing thecalibrationdiscussionattheBoardofDirectors.Nexttothisleadership scoreweighingforhalfoftheindividualcomponent,eachExCo-member wasassessedonanumberofspecicobjectiveslinkedtohisareaof responsibilityandtheimplementationoftheConnect21strategicplan.For theCROspecicKPIrelatedtotheRiskfunctionareweightingfor30%in theassessment.TheseKPIincludequalitativeandoperationalobjectives onEnterpriseRiskManagement(ERM),informationsecurityandGDPR,on ESGandclimaterelateddisclosures,onoptimizationofthebalancesheet andSCRandonthecompliancefunction. CORPORATEGOVERNANCESTATEMENT 79 Ageas Annual Report 2021 TheAgeasBusinessscoreisdeterminedbytheperformanceonanumberofnancialKPIsandstakeholderrelatedKPI.TheseKPIarecommonforallmembers oftheExCo.Theweightofthiscomponentis70%withtheexceptionfortheCROwhereitis40%. DetailofAgeasBusinessScore(1) AgeasMetrics Weight Threshold Target Maximum Actual Achieve- ment Pay-outas% of Maximum Financial Netprot 17.5% 741.0 926.2 1,194.9 945.4 18.74% 107.10% Earnings per share(EPS) 10.5% 4.07 5.09 6.57 5.06 10.17% 96.90% Growth 7.0% 7.24% 103.40% Combined Ratio 10.5% 97.1% 94.1% 93.1% 95.4% 4.55% 43.30% Operating margin guaranteed 7.0% 0.81% 0.91% 1.01% 0.99% 12.60% 180.00% Operating margin unit-linked 3.5% 0.26% 0.31% 0.41% 0.35% 4.90% 140.00% Stakeholders EmployeeNPS 3.5% noNPSdata& participation<40% NPS[0-25P]& participation>=70% NPS[75-100P]& participation>=80% NPS=62,48=top quartile,participation =86,9% 7.00% 200.00% CustomerNPS 3.5% averageofoperationalcompanies 5.18% 148.00% ESG-rating 7.0% noratingimprove- ment CO2 >30,000ton 4of6ratingsbetter CO2[20,000-22,000] ton 6of6ratingsbetter CO2<18,000ton 5of6ratingsbetter CO2=15,600ton 10.50% 150.00% Total 70% 81% 116% (1)Scoresrangefrom0%,to100%forontargetperformance,tomax200%foroverperformance. 80 Ageas Annual Report 2021 ThenancialKPIsetarefullyalignedwiththeConnect21strategicplan andbudget.WeightsofthedifferentKPIsremainedstableincomparison tolastyearwiththeexceptionofNetProtwhichwasslightlyincreasedto incorporatethegrowingimpactofthereinsuranceactivity. ThestakeholderKPIinclude • EmployeeNPS:employeenetpromotorscoreisbasedontheresults oftheengagementsurveysconductedinallconsolidatedentitiesand majorjointventures.Withaparticipationrateof86.9%andatopquartile NPSof62.48(Deloittebenchmark)amaximumscorewasachievedfor thisKPI. • CustomerNPS:customernetpromotorscoreismeasuredbased oncompetitiveandtransactionalNPS.Theaveragescoreforall Operationalcompaniesresultedinscoreof148%onarangeof0-200%. • ESG:The150%scorefortheESG-KPIisbasedontheimprovement oftheratingsfortheESGratingagencieswhere5ofthe6ratings haveimprovedoverthelastyear,onthereductionoftheCO2leveland theprogressmadeontheTaskForceonClimateRelatedFinancial Disclosure(TCFD). FormoredetailedinformationonthestakeholderKPIwerefertonote4 Sustainabilityattheheartofeverythingwedo. Multi-year variable remuneration (Long-Term incentive) Thegrantofthemulti-yearvariableremuneration(LTI)isbasedon theachievementofthe“AgeasBusinessScore”whichistheresultofthe achievementofthenancialKPIsasmentionedinthetableabove. WithanAgeasbusinessscoreof5(onarangeof1to7),theBoardof Directorsdecidedonagrantof150%ofthetargetoftheLTI(or67.5%of basecompensation). 5.7.7DerogationsanddeviationsfromtheRemunerationPolicy Therewerenoderogationsfromthepolicyduringnancialyear2021. 5.7.8 Comparative information on change of remuneration and company performance TotalCEO–payfor2021versustheaverageemployeeremuneration resultsinacomparativeratioof20.6Inrelationtothelowestemployee remunerationatageasSA/NVthisresultsinacomparativeratioof33.4We refertonoteC.6.3.2oftheannualreportforadetailedcomparativeand evolutivetable. 5.7.9 Shareholder vote and feedback Wevaluethedialoguewithourshareholdersandintegratetheir feedbackintheagendaanddiscussionsoftheRemunerationCommittee. TheRemunerationPolicywassubmittedforapprovalandvalidatedatthe GeneralMeetingofShareholdersofMay2020.Therehavebeennomajor changestothepolicysince. TheRemunerationReport2020wasvalidatedby63.66%ofshareholder votes.Givenourcommitmenttotransparencyandshareholderfeedback, wecontactedvariousShareholderstoobtainmorein-depthfeedback ontheirvoteontheRemunerationreportof2020.Asaresult,amore detailedviewontheachievementofthenon-nancialandnancialKPIs andtheirimpactonvariableremunerationhasbeenincludedinthisyear’s Remunerationreport.Wealsoconductedabenchmarkingexerciseonthe vestingconditionsoftheLTI-plan.Giventhattheoutcomeofthisexercise conrmedmixedobservationsastothemetricsappliedbyourpeers,we decidedtomaintainthecurrentvestingconditionswhilekeepingthematter underreview. 5.7.10Lookingaheadto2022 TheRemunerationCommitteediscussedthecompetitivebenchmarking oftheremunerationofthemembersoftheManagementandExecutive Committeeagainstcurrentmarketpractices.Onappointment,thesalary oftheCEOwassetatEUR650,000,atthelowerendoftherangeofEUR 650,000toEUR900,000gross/yearvalidatedbytheGeneralMeetingof shareholdersforCEO-remuneration.TheRemunerationfoundthatsince hisappointmenttheCEOperformedexceptionallywellamongstotherswith thesuccessfulclosureoftheConnect21-planwhichachievedallnancial targetsandthedevelopmentandcommunicationofthenewstrategicplan Impact24whichincludesastrongfocusonsustainablegrowthincluding theimpactontheGroup’sorganisationandthesettingupoftheChief DevelopmentandSustainabilityofce.Thebenchmarkingexerciseprovided byWillisTowersWatsonshowedthattheCEO’stotaldirectcompensation issignicantlylowerthanthemedianattargetwhencomparedwiththeBEL 20andtheEuropeanpeergroups.TheRemunerationCommitteetherefore recommendedandtheBoardapprovedtoincreasethebasecompensation oftheCEOofAgeastoEUR750,000gross/yearwhichiswithintherange ofEUR650,000toEUR900,000gross/yearasvalidatedbytheGeneral Meetingofshareholders.ThisincreaseappliesasofJanuary2022. NootherchangestoExecutiveCommitteeremunerationwereproposed. TheRemunerationCommitteediscussedthecompetitivebenchmarking fortheremunerationoftheBoardofDirectors.Basedonthisinformation itwasdecidedtoproposenochangestotheremunerationoftheBoardof Directorsfor2022. Finally,specicattentionwillbegiventotheimpactonremuneration practicesofupcomingregulatoryandreportingchangessuchasC-Ross2 andIFRS9/17. BoardofDirectors 29March2022 CORPORATEGOVERNANCESTATEMENT 81 Ageas Annual Report 2021 5.7.11 Our2021RemunerationPolicyataglance Executive Committee TheRemunerationPolicyofAgeas’sExecutiveCommitteemembersisreviewedannuallybytheRemunerationCommittee.Thetotalremunerationpackageof theExecutiveCommitteeMembersconsistsofthefollowingelementsthatwillbefurtherexplainedinthisreport: Base Compensation Other Beneﬁts One-Year Variable Multi-Year Variable Extraordinary Items Pension Expense = Fixed Remuneration = Variable Remuneration TOTAL REMUNERATION 51% 23% On target Base Compensation STILTI Maximum 26% 31% 35% 34% Base Compensation STILTI Thepiechartsbelowshowthepaymix(basecompensationvs.STIvs.LTI) foranExecutiveCommitteeMemberbothontargetandatmaximum: Other Executive Committee Members CRO Individual Corporate Individual Corporate Function Corporate Performance Criteria NetProt EPS Growth Combined Ratio Operated Margin Guaranteed OperatedMarginUnit-Linked EmployeeNPS CustomerNPS ESG-rating 30% 30% 70% 17.5% 10.5% 10.5% 3.5% 7.0% 7.0% 7.0% 3.5% 3.5% 30% 40% 82 Ageas Annual Report 2021 CORPORATEGOVERNANCESTATEMENT Fixed Remuneration Fixed Remuneration Principles Base Compensation BaseCompensationisreviewedannuallyandcomparedwiththatofotherBEL20companiesandmajorEuropean-basedinsurancerms. TheobjectiveofAgeasistopositionthebasecompensationoftheExecutiveCommitteewithinarangeof80%to120%ofthechosen medianmarketreference. OtherBenets TheExecutiveCommitteeMembersreceivebenetsinlinewithAgeas’sremunerationpolicy,includinghealthcare,death,disability coverageandacompanycar. Variable Remuneration 1.One-YearVariable(STI) Principles TheShort-TermIncentive(STI)ontargetissetat50%ofbase compensation,withamaximumopportunityequalto100%ofbase compensation. TheSTIissubjecttoadeferralperiodofthreeyears,i.e.STIfor performanceyearNispaidoutasfollows: • 50%duringN+1 • 25%duringN+2 • 25%duringN+3 InlinewiththeRemunerationPolicy,deferredamountsaresubjecttothe achievementofsustainedperformanceoverthedeferralperiodandare thereforesubjecttoupwardsordownwardsadjustments. TheShort-TermIncentivePlanincludesaclaw-backprovision. PerformanceCriteria Annualperformanceisassessedagainstbothcorporateandindividual performancecriteriaforallExecutiveCommitteeMembers.FortheCRO, therearespeciccriterialinkedtotheRiskfunction. 83 Ageas Annual Report 2021 2.Multi-YearVariable(LTI) Principles TheLong-TermIncentivePlantargetissetat45%ofbasecompensation forallExecutiveCommitteeMembers,withamaximumopportunityequalto 90%ofbasecompensation. Performance/VestingandHoldingPeriod Theperformancesharesvest3.5yearsaftergrant.Aftervesting,the shareswillhavetobeheldforanadditional1.5years(5yearsintotalas ofdateofgrant).Afterthisblockingperiod,thebeneciariesmaysellthe vestedsharesundercertainconditionsinlinewiththeRemunerationPolicy. PerformanceCriteria Atwo-stepmethodologyisusedtodeterminethenumberofsharesthat willbegranted(step1)andthenumberofsharesthatwillvestattheendof theperformanceperiod(step2). Step 1 - Grant methodology Thenumberofsharestobegrantedunderthisplanisbasedonthe “AgeasBusinessScore”whichistheresultoftheachievementonthe corporateKPIs(pleaserefertotheSTIsectionjustaboveforfurtherdetails) andiscalculatedasfollows: Grant AGEASBusinessScore %ofTarget %ofBaseCompensation <3 0% 0% 3 50% 22.50% 4(ontarget) 100% 45% 5 150% 67.50% 6or7 200% 90% Step 2 - Vesting methodology Thevesting3.5yearsaftergrantissubjecttoarelativetotalshareholderreturn(TSR)performancemeasurementascomparedtoapeergroup.Thevesting schemeoftheperformancesharesisshowninthefollowingtable.Inanycasethetotalsharesattributedatvestingwillneverexceedanamountofsharesequalto 90%ofbasecompensationdividedbythesharepriceatinitialgrant. PercentileTSRRanking Vesting% ≥75% 200% ≥60%-<75% 150% ≥40%-<60% 100% ≥25%-<40% 50% <25% 0% PeerGroup Thefollowingcompanies,whichhaveacomparablebusinessmodelandincludeanumberofcompetitors,constitutethepeergroupforthe2021grant: AEGONNV KBCGROEPNV ALLIANZSE-REG MAPFRESA ASSICURAZIONIGENERALI NATIONALENEDERLANDEN AVIVAPLC PRUDENTIALPLC AXASA SAMPOOYJ-ASHS BALOISEINSURANCE SWISSLIFEHOLDINGAG-REG BNPPARIBAS VIENNAINSURANCEGROUPAG CNPASSURANCES ZURICHINSURANCEGROUPAG Shareholding requirement MembersoftheExecutiveCommitteearesubjecttoashareholdingrequirementof100%ofgrossbasecompensation.Aslongastheyhavenotreachedor respectthisthreshold,theywillberestrictedfromsellingshareswhichvestundertheLTI-plan(excludingthesaleofsharestocovertaxesonvesting). ThevaluationoftherequirementwillhappenyearlybasedontheshareholdingbytheExecutiveDirectorat31/12. 84 Ageas Annual Report 2021 CORPORATEGOVERNANCESTATEMENT Extraordinary items and Pension PayElement Principles Extraordinary items ForeachMemberoftheExecutiveCommittee,severancepayequals12months’salarywhichcaninspeciccircumstancesbeincreasedto18months(including thenon-competitionprovision).MoredetailedinformationonterminationarrangementsapplicabletotheExecutiveCommitteeisavailableinourRemuneration PolicywhichcanbefoundonAgeas’swebsite. Pension ExecutiveCommitteeMembersbenetfromaDenedContributionpensionplan.ThepensioncontributionforExecutiveCommitteeMembersisequalto25%of (basecompensation+variablepay).Thisplanincludesdeathcoverageaswell. Board of Directors Board of ageas SA/NV Perpolicyterms,Non-ExecutiveBoardMembersofAgeasreceiveaxedfeeandanattendancefee,whereasCommitteeMembersonlyreceiveattendance fees.ThetablebelowgivesanoverviewofthexedfeesandattendancefeesapplicabletotheAgeasBoardsince1January2018. Board Committee Chair Member Chair Member FixedFee EUR120,000 EUR60,000 N/A N/A AttendanceFee EUR2,500 EUR2,000 EUR2,000 EUR1,500 InaccordancewiththeRemunerationPolicy,Non-ExecutiveBoardMembersdonotreceivevariableandorequity-relatedremunerationandarenotentitledto pensionrights. Inlinewithprinciple7.6ofthenewBelgianCorporateGovernanceCode 2020,Non-ExecutiveBoardmemberswillreceiveuptoamaximumof20% oftheirxedremunerationintheformofAgeasshares.Thisprinciplewillbe appliedasofanyfutureincreaseofBoardremuneration. TheremunerationoftheExecutiveBoardMembers(i.e.theExecutive CommitteeMembers)isrelatedexclusivelytotheirpositionasExecutive CommitteeMembers. Representing ageas SA/NV in Ageas Group consolidated entities TheremunerationoftheNon-executiveDirectorsrepresentingageasSA/NVinAgeasGroupconsolidatedentitieshasbeenalignedsince1January2019 accordingtothetablebelow: Board Committee Chair Member Chair Member FixedFee EUR60,000 EUR45,000 N/A N/A AttendanceFee EUR2,500 EUR2,000 EUR2,000 EUR1,500 85 Ageas Annual Report 2021 B Consolidated Financial Statements 2021 86 | 240 (before appropriation of profit) 31 December 31 December Note 2021 2020 Assets Cash and cash equivalents 9 1,937 2,241 Financial investments 10 59,952 63,710 Investment property 11 3,117 2,889 Loans 12 14,492 13,398 Investments related to unit-linked contracts 18,899 17,088 Equity accounted investments 13 5,328 4,929 Reinsurance and other receivables 14 2,149 1,961 Current tax assets 53 49 Deferred tax assets 22 100 98 Accrued interest and other assets 15 2,039 1,885 Property, plant and equipment 16 1,732 1,827 Goodwill and other intangible assets 17 1,322 1,229 Assets held for sale 19 114 Total assets 111,139 111,418 Liabilities Liabilities arising from Life insurance contracts 19.1 28,673 29,973 Liabilities arising from Life investment contracts 19.2 30,617 31,629 Liabilities related to unit-linked contracts 19.3 18,901 17,090 Liabilities arising from Non-life insurance contracts 19.4 7,889 7,404 Subordinated liabilities 20 2,748 2,758 Borrowings 21 3,616 3,920 Current tax liabilities 16 89 Deferred tax liabilities 22 971 1,105 RPN(I) 23 520 420 Accrued interest and other liabilities 24 2,834 2,934 Provisions 25 182 322 Liabilities related to assets held for sale Total liabilities 96,967 97,644 Shareholders' equity 18 11,914 11,555 Non-controlling interests 26 2,258 2,219 Total equity 14,172 13,774 Total liabilities and equity 111,139 111,418 Consolidated statement of financial position Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 87 | 240 Note 2021 2020 Income - Gross premium income 8,979 8,435 - Change in unearned premiums 14 (22) - Ceded earned premiums (460) (411) Net earned premiums 30 8,533 8,002 Interest, dividend and other investment income 31 2,427 2,392 Unrealised gain (loss) on RPN(I) 23 (101) (61) Result on sales and revaluations 32 294 639 Investment income related to unit-linked contracts 33 1,406 484 Share in result of equity accounted investments 13 464 328 Fee and commission income 34 467 385 Other income 35 282 201 Total income 13,772 12,370 Expenses - Insurance claims and benefits, gross (7,757) (6,966) - Insurance claims and benefits, ceded 286 151 Insurance claims and benefits, net 36 (7,471) (6,815) Charges related to unit-linked contracts (1,572) (610) Financing costs 37 (138) (139) Change in impairments 38 (41) (172) Change in provisions 25 15 36 Fee and commission expenses 39 (1,213) (1,138) Staff expenses 40 (852) (834) Other expenses 41 (1,269) (1,165) Total expenses (12,541) (10,837) Result before taxation 1,231 1,533 Tax income (expenses) 42 (215) (233) Net result for the period 1,016 1,300 Attributable to non-controlling interests 26 171 159 Net result attributable to shareholders 845 1,141 Per share data (EUR) Basic earnings per share 18 4.52 6.07 Diluted earnings per share 18 4.52 6.06 Gross inflow (sum of gross written premiums and premium inflow from investment contracts without discretionary participation features) can be presented as below. Note 2021 2020 Gross premium income 8,979 8,435 Inflow deposit accounting (directly recognised as liability) 30 1,826 1,057 Gross inflow 10,805 9,492 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Consolidated income statement CO NS OLIDATED FINAN CI AL STATEMENT S 2021 86 Ageas Annual Report 2021 Consolidated statement of ﬁnancial position 86 | 240 (before appropriation of profit) 31 December 31 December Note 2021 2020 Assets Cash and cash equivalents 9 1,937 2,241 Financial investments 10 59,952 63,710 Investment property 11 3,117 2,889 Loans 12 14,492 13,398 Investments related to unit-linked contracts 18,899 17,088 Equity accounted investments 13 5,328 4,929 Reinsurance and other receivables 14 2,149 1,961 Current tax assets 53 49 Deferred tax assets 22 100 98 Accrued interest and other assets 15 2,039 1,885 Property, plant and equipment 16 1,732 1,827 Goodwill and other intangible assets 17 1,322 1,229 Assets held for sale 19 114 Total assets 111,139 111,418 Liabilities Liabilities arising from Life insurance contracts 19.1 28,673 29,973 Liabilities arising from Life investment contracts 19.2 30,617 31,629 Liabilities related to unit-linked contracts 19.3 18,901 17,090 Liabilities arising from Non-life insurance contracts 19.4 7,889 7,404 Subordinated liabilities 20 2,748 2,758 Borrowings 21 3,616 3,920 Current tax liabilities 16 89 Deferred tax liabilities 22 971 1,105 RPN(I) 23 520 420 Accrued interest and other liabilities 24 2,834 2,934 Provisions 25 182 322 Liabilities related to assets held for sale Total liabilities 96,967 97,644 Shareholders' equity 18 11,914 11,555 Non-controlling interests 26 2,258 2,219 Total equity 14,172 13,774 Total liabilities and equity 111,139 111,418 Consolidated statement of financial position Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 87 | 240 Note 2021 2020 Income - Gross premium income 8,979 8,435 - Change in unearned premiums 14 (22) - Ceded earned premiums (460) (411) Net earned premiums 30 8,533 8,002 Interest, dividend and other investment income 31 2,427 2,392 Unrealised gain (loss) on RPN(I) 23 (101) (61) Result on sales and revaluations 32 294 639 Investment income related to unit-linked contracts 33 1,406 484 Share in result of equity accounted investments 13 464 328 Fee and commission income 34 467 385 Other income 35 282 201 Total income 13,772 12,370 Expenses - Insurance claims and benefits, gross (7,757) (6,966) - Insurance claims and benefits, ceded 286 151 Insurance claims and benefits, net 36 (7,471) (6,815) Charges related to unit-linked contracts (1,572) (610) Financing costs 37 (138) (139) Change in impairments 38 (41) (172) Change in provisions 25 15 36 Fee and commission expenses 39 (1,213) (1,138) Staff expenses 40 (852) (834) Other expenses 41 (1,269) (1,165) Total expenses (12,541) (10,837) Result before taxation 1,231 1,533 Tax income (expenses) 42 (215) (233) Net result for the period 1,016 1,300 Attributable to non-controlling interests 26 171 159 Net result attributable to shareholders 845 1,141 Per share data (EUR) Basic earnings per share 18 4.52 6.07 Diluted earnings per share 18 4.52 6.06 Gross inflow (sum of gross written premiums and premium inflow from investment contracts without discretionary participation features) can be presented as below. Note 2021 2020 Gross premium income 8,979 8,435 Inflow deposit accounting (directly recognised as liability) 30 1,826 1,057 Gross inflow 10,805 9,492 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Consolidated income statement 87 Ageas Annual Report 2021 Consolidated income statement 88 | 240 Note 2021 2020 COMPREHENSIVE INCOME Items that will not be reclassified to the income statement: Remeasurement of defined benefit liability 131 (71) Related tax (34) 17 Remeasurement of defined benefit liability 6 97 (54) Total of items that will not be reclassified to the income statement: 97 (54) Items that are or may be reclassified to the income statement: Change in amortisation of investments held to maturity 2 4 Related tax (1) Change in amortisation of investments held to maturity 10 2 3 Change in revaluation of investments available for sale (1) (298) 81 Related tax 161 (37) Change in revaluation of investments available for sale 10 (137) 44 Share of other comprehensive income of equity accounted investments 13 (168) 144 Change in foreign exchange differences 291 (356) Total items that are or may be reclassified to the income statement: (12) (165) Other comprehensive income for the period 85 (219) Net result for the period 1,016 1,300 Total comprehensive income for the period 1,101 1,081 Net result attributable to non-controlling interests 171 159 Other comprehensive income attributable to non-controlling interests 12 (34) Total comprehensive income attributable to non-controlling interests 183 125 Total comprehensive income attributable to shareholders 918 956 (1) Change in revaluation of investments available for sale, includes the revaluation of cash flow hedges and is net of currency differences and shadow accounting. C onsolidated statement of comprehensive income Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 89 | 240 Share Currency Net result Unrealised Share- Non- Share premium Other translation attributable to gains holders controlling Total capital reserve reserves reserve shareholders and losses equity interests Equity Balance as at 1 January 2020 1,502 2,051 2,663 95 979 3,931 11,221 2,260 13,481 Net result for the period 1,141 1,141 159 1,300 Revaluation of investments 212 212 (21) 191 Remeasurement IAS 19 (42) (42) (12) (54) Foreign exchange differences (355) (355) (1) (356) Total non-owner changes in equity (42) (355) 1,141 212 956 125 1,081 Transfer 979 (979) Dividend (485) (485) (167) (652) Change in capital 8 8 Treasury shares (131) (131) (131) Share-based compensation 1 1 1 Other changes in equity (1) (7) (7) (7) (14) Balance as at 1 January 2021 1,502 2,051 2,978 (260) 1,141 4,143 11,555 2,219 13,774 Net result for the period 845 845 171 1,016 Revaluation of investments (296) (296) (7) (303) Remeasurement IAS 19 79 79 18 97 Foreign exchange differences 290 290 1 291 Total non-owner changes in equity 79 290 845 (296) 918 183 1,101 Transfer 1,141 (1,141) Dividend (485) (485) (140) (625) Change in capital 2 2 Treasury shares (52) (52) (52) Share-based compensation (1) (1) (1) Other changes in equity (1) (20) (1) (21) (6) (27) Balance as at 31 December 2021 1,502 2,051 3,640 29 845 3,847 11,914 2,258 14,172 (1) Other changes in shareholders’ equity include changes in the fair value of the put option on Interparking shares, an indemnity paid to BNP Paribas Fortis SA/NV for Ageas shares held related to the CASHES securities (see note 43.2) and, if and when applicable, capital distributions to holders of FRESH and CASHES securities because Ageas’s dividend yield exceeded 5%. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). C onsolidated statement of changes in equity CO NS OLIDATED FINAN CI AL STATEMENT S 2021 88 Ageas Annual Report 2021 Consolidated statement of comprehensive income 88 | 240 Note 2021 2020 COMPREHENSIVE INCOME Items that will not be reclassified to the income statement: Remeasurement of defined benefit liability 131 (71) Related tax (34) 17 Remeasurement of defined benefit liability 6 97 (54) Total of items that will not be reclassified to the income statement: 97 (54) Items that are or may be reclassified to the income statement: Change in amortisation of investments held to maturity 2 4 Related tax (1) Change in amortisation of investments held to maturity 10 2 3 Change in revaluation of investments available for sale (1) (298) 81 Related tax 161 (37) Change in revaluation of investments available for sale 10 (137) 44 Share of other comprehensive income of equity accounted investments 13 (168) 144 Change in foreign exchange differences 291 (356) Total items that are or may be reclassified to the income statement: (12) (165) Other comprehensive income for the period 85 (219) Net result for the period 1,016 1,300 Total comprehensive income for the period 1,101 1,081 Net result attributable to non-controlling interests 171 159 Other comprehensive income attributable to non-controlling interests 12 (34) Total comprehensive income attributable to non-controlling interests 183 125 Total comprehensive income attributable to shareholders 918 956 (1) Change in revaluation of investments available for sale, includes the revaluation of cash flow hedges and is net of currency differences and shadow accounting. C onsolidated statement of comprehensive income Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Share Currency Net result Unrealised Share- Non- Share premium Other translation attributable to gains holders controlling Total capital reserve reserves reserve shareholders and losses equity interests Equity Balance as at 1 January 2020 1,502 2,051 2,663 95 979 3,931 11,221 2,260 13,481 Net result for the period 1,141 1,141 159 1,300 Revaluation of investments 212 212 (21) 191 Remeasurement IAS 19 (42) (42) (12) (54) Foreign exchange differences (355) (355) (1) (356) Total non-owner changes in equity (42) (355) 1,141 212 956 125 1,081 Transfer 979 (979) Dividend (485) (485) (167) (652) Change in capital 8 8 Treasury shares (131) (131) (131) Share-based compensation 1 1 1 Other changes in equity (1) (7) (7) (7) (14) Balance as at 1 January 2021 1,502 2,051 2,978 (260) 1,141 4,143 11,555 2,219 13,774 Net result for the period 845 845 171 1,016 Revaluation of investments (296) (296) (7) (303) Remeasurement IAS 19 79 79 18 97 Foreign exchange differences 290 290 1 291 Total non-owner changes in equity 79 290 845 (296) 918 183 1,101 Transfer 1,141 (1,141) Dividend (485) (485) (140) (625) Change in capital 2 2 Treasury shares (52) (52) (52) Share-based compensation (1) (1) (1) Other changes in equity (1) (20) (1) (21) (6) (27) Balance as at 31 December 2021 1,502 2,051 3,640 29 845 3,847 11,914 2,258 14,172 (1) Other changes in shareholders’ equity include changes in the fair value of the put option on Interparking shares, an indemnity paid to BNP Paribas Fortis SA/NV for Ageas shares held related to the CASHES securities (see note 43.2) and, if and when applicable, capital distributions to holders of FRESH and CASHES securities because Ageas’s dividend yield exceeded 5%. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). C onsolidated statement of changes in equity 89 Ageas Annual Report 2021 Consolidated statement of changes in equity 90 | 240 Note 2021 2020 Cash and cash equivalents as at 1 January 9 2,241 3,745 Result before taxation 1,231 1,533 Adjustments to non-cash items included in result before taxation: Remeasurement RPN(I) 23 101 61 Result on sales and revaluations 32 (294) (639) Share in result of equity accounted investments 13 (464) (328) Depreciation, amortisation and accretion 41 833 854 Impairments 38 41 172 Provisions 25 (15) (36) Share-based compensation expense 40 7 3 Total adjustments to non-cash items included in result before taxation 209 87 Changes in operating assets and liabilities: Derivatives held for trading (assets and liabilities) 10 17 (9) Loans 12 (1,093) (2,331) Reinsurance and other receivables 14 (57) (176) Investments related to unit-linked contracts (1,812) (659) Proceeds from the issuance of borrowings 21 13 1,053 Payment of borrowings 21 (375) (90) Liabilities arising from insurance and investment contracts 19.1 & 19.2 & 19.4 (1,723) 987 Liabilities related to unit-linked contracts 19.3 2,045 560 Net changes in all other operational assets and liabilities 524 (2,248) Dividend received from associates 13 219 169 Income tax paid (263) (205) Total changes in operating assets and liabilities (2,505) (2,949) Cash flow from operating activities (1,065) (1,329) Investing activities within the group (1) 2 Purchases of financial investments 10 (4,751) (5,955) Proceeds from sales and redemptions of financial investments 10 6,547 7,431 Purchases of investment property 11 (377) (557) Proceeds from sales of investment property 11 177 328 Purchases of property, plant and equipment 16 (50) (262) Proceeds from sales of property, plant and equipment 16 24 7 Acquisitions of subsidiaries and equity accounted investments (including capital increases in equity accounted investments) 3 (233) (440) Divestments of subsidiaries and equity accounted investments (including capital repayments of equity accounted investments) 3 200 175 Purchases of intangible assets 17 (97) (96) Proceeds from sales of intangible assets 2 Cash flow from investing activities 1,439 635 Proceeds from the issuance of subordinated liabilities 20 498 Redemption of subordinated liabilities 20 (507) Purchases of treasury shares (56) (131) Dividends paid to shareholders of parent companies (485) (485) Dividends paid to non-controlling interests (140) (167) Repayment of capital (including minority interests) (3) (12) Cash flow from financing activities (684) (804) Effect of exchange rate differences on cash and cash equivalents 6 (6) Cash and cash equivalents as at 31 December 9 1,937 2,241 Supplementary disclosure of operating cash flow information Interest received 1,840 1,909 Dividend received from financial investments 31 161 128 Interest paid (142) (132) Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Consolidated statement of cash flow CO NS OLIDATED FINAN CI AL STATEMENT S 2021 90 Ageas Annual Report 2021 Consolidated statement of cash ﬂow C General Notes 90 | 240 Note 2021 2020 Cash and cash equivalents as at 1 January 9 2,241 3,745 Result before taxation 1,231 1,533 Adjustments to non-cash items included in result before taxation: Remeasurement RPN(I) 23 101 61 Result on sales and revaluations 32 (294) (639) Share in result of equity accounted investments 13 (464) (328) Depreciation, amortisation and accretion 41 833 854 Impairments 38 41 172 Provisions 25 (15) (36) Share-based compensation expense 40 7 3 Total adjustments to non-cash items included in result before taxation 209 87 Changes in operating assets and liabilities: Derivatives held for trading (assets and liabilities) 10 17 (9) Loans 12 (1,093) (2,331) Reinsurance and other receivables 14 (57) (176) Investments related to unit-linked contracts (1,812) (659) Proceeds from the issuance of borrowings 21 13 1,053 Payment of borrowings 21 (375) (90) Liabilities arising from insurance and investment contracts 19.1 & 19.2 & 19.4 (1,723) 987 Liabilities related to unit-linked contracts 19.3 2,045 560 Net changes in all other operational assets and liabilities 524 (2,248) Dividend received from associates 13 219 169 Income tax paid (263) (205) Total changes in operating assets and liabilities (2,505) (2,949) Cash flow from operating activities (1,065) (1,329) Investing activities within the group (1) 2 Purchases of financial investments 10 (4,751) (5,955) Proceeds from sales and redemptions of financial investments 10 6,547 7,431 Purchases of investment property 11 (377) (557) Proceeds from sales of investment property 11 177 328 Purchases of property, plant and equipment 16 (50) (262) Proceeds from sales of property, plant and equipment 16 24 7 Acquisitions of subsidiaries and equity accounted investments (including capital increases in equity accounted investments) 3 (233) (440) Divestments of subsidiaries and equity accounted investments (including capital repayments of equity accounted investments) 3 200 175 Purchases of intangible assets 17 (97) (96) Proceeds from sales of intangible assets 2 Cash flow from investing activities 1,439 635 Proceeds from the issuance of subordinated liabilities 20 498 Redemption of subordinated liabilities 20 (507) Purchases of treasury shares (56) (131) Dividends paid to shareholders of parent companies (485) (485) Dividends paid to non-controlling interests (140) (167) Repayment of capital (including minority interests) (3) (12) Cash flow from financing activities (684) (804) Effect of exchange rate differences on cash and cash equivalents 6 (6) Cash and cash equivalents as at 31 December 9 1,937 2,241 Supplementary disclosure of operating cash flow information Interest received 1,840 1,909 Dividend received from financial investments 31 161 128 Interest paid (142) (132) Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Consolidated statement of cash flow 91 Ageas Annual Report 2021 C General Notes 92 | 240 Since early 2020, the Covid-19 pandemic has resulted in additional uncertainties in the operating environment of Ageas.  The impact on performance is highlighted in Section A of this Annual Report as are the impacts on society, our employees and philanthropy initiatives.  The impact on our risk taxonomy is discussed in Section C, note 4.6.  The uncertainties regarding management judgements, accounting estimates and assumptions are discussed in Section C, note 2.3.  Impacts on lines of the income statement are explained in Section A and in various notes in Sections C and D (see notes 2.2.1., 14, 31, 38, 41). Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). (deze is hoger dan vorige – dat klopt!) Covid- 19 93 | 240 ageas SA/NV, incorporated in Belgium with its registered office at Rue du Marquis 1/ Markiesstraat 1, Brussels, Belgium, is the parent company of the Ageas group. The Annual Report includes the Consolidated Financial Statements of the Ageas group and the Financial Statements of ageas SA/NV. Ageas group carries out life, non-life insurance and reinsurance business in Europe and Asia. Ageas shares are listed on the regulated market of Euronext Brussels. Ageas has a sponsored ADR programme in the United States. Known shareholders of ageas SA/NV, based on the official notifications, as at 31 December 2021 are:  Fosun 10.01%;  BlackRock, Inc 5.23%;  Ping An 5.17%;  Schroders Plc 3.02%;  ageas SA/NV and its subsidiaries hold 2.13% of its own shares. This interest is related to the FRESH (see note 18 Shareholders’ equity and note 20 Subordinated liabilities), restricted share programmes and the share buy-back programmes (see note 18 Shareholders’ equity). The legal structure of Ageas is per 31 December 2021 as follows. Finteas NV has been liquidated as per 22 December 2021. Fully consolidated entities of Ageas in Continental Europe are in Portugal, Millenniumbcp Ageas (51%), Ocidental Seguros (100%), Médis (100%), Ageas Portugal Vida (100%) and Ageas Portugal Seguros (100%) and in France, Ageas France (100%). The full list of undertakings in the scope of the Group is published in the ‘Group Public Disclosure QRTs’ which can be found on the website: https://www.ageas.com/investors/quarterly-results. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 1 Legal structure Dit figuur (en volgende) staat ‘klein’ in het WERK-worddocument omdat het origineel in Indesign er bovenop wordt gezet in de juiste kwaliteit. Organogrammen in de rest van het document dus klein ter illustratie waar een figuur gaat komen. GENERAL NOTES 92 Ageas Annual Report 2021 Covid-19 92 | 240 Since early 2020, the Covid-19 pandemic has resulted in additional uncertainties in the operating environment of Ageas.  The impact on performance is highlighted in Section A of this Annual Report as are the impacts on society, our employees and philanthropy initiatives.  The impact on our risk taxonomy is discussed in Section C, note 4.6.  The uncertainties regarding management judgements, accounting estimates and assumptions are discussed in Section C, note 2.3.  Impacts on lines of the income statement are explained in Section A and in various notes in Sections C and D (see notes 2.2.1., 14, 31, 38, 41). Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). (deze is hoger dan vorige – dat klopt!) Covid- 19 93 | 240 ageas SA/NV, incorporated in Belgium with its registered office at Rue du Marquis 1/ Markiesstraat 1, Brussels, Belgium, is the parent company of the Ageas group. The Annual Report includes the Consolidated Financial Statements of the Ageas group and the Financial Statements of ageas SA/NV. Ageas group carries out life, non-life insurance and reinsurance business in Europe and Asia. Ageas shares are listed on the regulated market of Euronext Brussels. Ageas has a sponsored ADR programme in the United States. Known shareholders of ageas SA/NV, based on the official notifications, as at 31 December 2021 are:  Fosun 10.01%;  BlackRock, Inc 5.23%;  Ping An 5.17%;  Schroders Plc 3.02%;  ageas SA/NV and its subsidiaries hold 2.13% of its own shares. This interest is related to the FRESH (see note 18 Shareholders’ equity and note 20 Subordinated liabilities), restricted share programmes and the share buy-back programmes (see note 18 Shareholders’ equity). The legal structure of Ageas is per 31 December 2021 as follows. Finteas NV has been liquidated as per 22 December 2021. Fully consolidated entities of Ageas in Continental Europe are in Portugal, Millenniumbcp Ageas (51%), Ocidental Seguros (100%), Médis (100%), Ageas Portugal Vida (100%) and Ageas Portugal Seguros (100%) and in France, Ageas France (100%). The full list of undertakings in the scope of the Group is published in the ‘Group Public Disclosure QRTs’ which can be found on the website: https://www.ageas.com/investors/quarterly-results. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 1 Legal structure Dit figuur (en volgende) staat ‘klein’ in het WERK-worddocument omdat het origineel in Indesign er bovenop wordt gezet in de juiste kwaliteit. Organogrammen in de rest van het document dus klein ter illustratie waar een figuur gaat komen. 93 Ageas Annual Report 2021 Legal structure AS SA/NV 100% Ageas Insurance International NV ageas SA/NV 100% Ageas UK Ltd. 44.7% Royal Park Investments SA/NV 100% Ageasﬁnlux SA 100% Goldpark International Investments BV 75% AG Insurance SA/NV Various legal entities part of Ageas Asia Presence in China, Thailand, Malaysia, India Philippines and Vietnam Presence in Portugal, France and Turkey Various legal entities part of Continental Europe 94 | 240 The Ageas Consolidated Financial Statements 2021 (‘Consolidated Financial Statements’), including all the notes, comply with the International Financial Reporting Standards (IFRS) required as at 1 January 2021, as issued by the International Accounting Standards Board (IASB) and endorsed by the European Union (EU). 2.1 Basis of accounting The accounting policies applied in these Consolidated Financial Statements are consistent with those applied for the year ended as at 31 December 2020, except for the changes listed in paragraph 2.2 below. These Consolidated Financial Statements are prepared on a going concern basis and are presented in rounded millions of euros, the functional currency of the parent company of Ageas, unless indicated otherwise. Assets and liabilities recorded in the statement of financial position of Ageas usually have a duration of more than 12 months, except for cash and cash equivalents, reinsurance and other receivables, accrued interest and other assets, non-life insurance liabilities, some borrowings like repurchase agreements, accrued interest and other liabilities and current tax assets and liabilities. The most significant IFRS standards applied for the measurement of the assets and liabilities are:  IAS 1 for presentation of financial statements;  IAS 16 for property, plant and equipment;  IAS 19 for employee benefits;  IAS 23 for borrowing costs (loans);  IAS 28 for investments in associates and joint ventures;  IAS 32 for financial instruments – presentation;  IAS 36 for impairment of assets;  IAS 38 for intangible assets;  IAS 39 for financial instruments – recognition and measurement;  IAS 40 for investment property;  IFRS 3 for business combinations;  IFRS 4 for insurance contracts;  IFRS 7 for disclosures of financial instruments;  IFRS 8 for operating segments;  IFRS 10 for consolidated financial statements;  IFRS 12 for disclosure of interests in other entities;  IFRS 13 for fair value measurement;  IFRS 15 for revenue from contracts with customers; and  IFRS 16 for leases. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 2 Summary of accounting policies 95 | 240 2.2 Changes in accounting policies 2.2.1 Current-year changes in IFRS standards In 2021, the following new or revised IFRS standards, interpretations and amendments to IFRS standards and interpretations became effective, as endorsed by the EU. Interest Rate Benchmark Reform (phase 2) – Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 To meet new regulatory and market requirements, the interest rate benchmarks that are used as reference rates in the financial market to determine interest rates and payment obligations are undergoing in- depth reforms and transitions. As a result of this reform, some benchmarks such as Eonia and Libor might be discontinued. To deal with the accounting consequences of those reforms, the IASB issued two amendments:  In September 2019, the IASB issued amendments to IFRS 9, IAS 39 and IFRS 7 on ‘Interest Rate Benchmark Reform’ (phase 1). The EU endorsed these amendments in January 2020 and they apply for annual reporting periods beginning on or after 1 January 2020.  In August 2020, the IASB issued amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 on ‘Interest Rate Benchmark Reform’ (phase 2). The EU endorsed these amendments in January 2021 and they apply for annual reporting periods beginning on or after 1 January 2021. Ageas did not early adopt both amendments. The phase 1 amendments deal with potential issues in the period preceding the replacement of the actual interest rate benchmarks with alternative rates, while the phase 2 amendments deal with potential replacement issues. The amendments provide (mandatory) temporary reliefs from applying specific hedge accounting requirements to hedging relationships that are directly affected by uncertainties related to the interest rate benchmark reform. The existing hedging relationships can continue to exist during the period of uncertainty caused by the reform. Furthermore, the amendments provide a practical expedient for situations where the transition from the actual interest rate benchmark into an alternative benchmark results in changes in the contractual cash flows of financial assets, liabilities or leases. The practical expedient enables entities not to derecognise those assets or liabilities and to treat the changes to cash flows, that are directly required by the reform, as changes to a floating interest rate, equivalent to a movement in a market rate or interest. As at 31 December 2021, a notional amount of hedging relationships linked to the EURIBOR for EUR 849 million and a principal amount of subordinated liabilities with a floating coupon rate linked to the EURIBOR for EUR 442.8 million are included in these Consolidated Financial Statements. In 2019, the EURIBOR has been reformed to a hybrid methodology and the Financial Services and Markets Authority (FSMA) authorised the European Money Markets Institute (EMMI) as administrator of the EURIBOR benchmark, implying that the EURIBOR may be used in a foreseeable future by EU supervised entities. As from January 2022, the European Securities and Market Authority (ESMA) will substitute the FSMA as supervisor of the EURIBOR. The ESMA already confirmed in September 2020 that the discontinuation of the EURIBOR is not part of its plans. Ageas monitors the developments regarding the interest rate benchmark reform. Because the EURIBOR may be discontinued one day, fallbacks are introduced in new contracts and Ageas monitors the impact on on- going contracts, to ensure the continuity of the contracts in the unlikely scenario of discontinuation of the EURIBOR. As at 31 December 2021, the amendments had no impact on the consolidated statement of financial position or income statement of Ageas. Covid-19-related rent concessions – Amendments to IFRS 16 Ageas applies IFRS 16 ‘Leases’, as issued by the IASB in January 2016 and endorsed by the EU in November 2017, since 1 January 2019. As a result of the Covid-19 pandemic, lessors may have provided rent concessions to lessees. Rent concessions include rent holidays or rent reductions for a period of time, possibly followed by increased rent payments in future periods. To deal with rent concessions that are provided as a consequence of the Covid-19 pandemic, the IASB issued in May 2020 amendments to IFRS 16 ‘Covid-19-related rent concessions’. The EU endorsed these amendments in October 2020. These amendments provide lessees a practical expedient not to assess whether Covid-19-related rent concessions, that reduce lease payments due on or before 30 June 2021, are a lease modification. As lessee, Ageas did not benefit from Covid-19-related rent concessions, that would result in a lease modification. Consequently, the amendments to IFRS 16 had no impact on the consolidated statement of financial position or income statement of Ageas. Given the ongoing Covid-19 pandemic, the IASB issued in March 2021 an amendment to extend the practical expedient above for rent concessions that reduce lease payments due on or before 30 June 2022. The EU endorsed this extension in August 2021. Considering that Ageas did not benefit from Covid-19-related concessions, this extension did not and is not expected to have an impact on the consolidated statement of financial position or income statement of Ageas. GENERAL NOTES 94 Ageas Annual Report 2021 Summary of accounting policies 94 | 240 The Ageas Consolidated Financial Statements 2021 (‘Consolidated Financial Statements’), including all the notes, comply with the International Financial Reporting Standards (IFRS) required as at 1 January 2021, as issued by the International Accounting Standards Board (IASB) and endorsed by the European Union (EU). 2.1 Basis of accounting The accounting policies applied in these Consolidated Financial Statements are consistent with those applied for the year ended as at 31 December 2020, except for the changes listed in paragraph 2.2 below. These Consolidated Financial Statements are prepared on a going concern basis and are presented in rounded millions of euros, the functional currency of the parent company of Ageas, unless indicated otherwise. Assets and liabilities recorded in the statement of financial position of Ageas usually have a duration of more than 12 months, except for cash and cash equivalents, reinsurance and other receivables, accrued interest and other assets, non-life insurance liabilities, some borrowings like repurchase agreements, accrued interest and other liabilities and current tax assets and liabilities. The most significant IFRS standards applied for the measurement of the assets and liabilities are:  IAS 1 for presentation of financial statements;  IAS 16 for property, plant and equipment;  IAS 19 for employee benefits;  IAS 23 for borrowing costs (loans);  IAS 28 for investments in associates and joint ventures;  IAS 32 for financial instruments – presentation;  IAS 36 for impairment of assets;  IAS 38 for intangible assets;  IAS 39 for financial instruments – recognition and measurement;  IAS 40 for investment property;  IFRS 3 for business combinations;  IFRS 4 for insurance contracts;  IFRS 7 for disclosures of financial instruments;  IFRS 8 for operating segments;  IFRS 10 for consolidated financial statements;  IFRS 12 for disclosure of interests in other entities;  IFRS 13 for fair value measurement;  IFRS 15 for revenue from contracts with customers; and  IFRS 16 for leases. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 2 Summary of accounting policies 95 | 240 2.2 Changes in accounting policies 2.2.1 Current-year changes in IFRS standards In 2021, the following new or revised IFRS standards, interpretations and amendments to IFRS standards and interpretations became effective, as endorsed by the EU. Interest Rate Benchmark Reform (phase 2) – Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 To meet new regulatory and market requirements, the interest rate benchmarks that are used as reference rates in the financial market to determine interest rates and payment obligations are undergoing in- depth reforms and transitions. As a result of this reform, some benchmarks such as Eonia and Libor might be discontinued. To deal with the accounting consequences of those reforms, the IASB issued two amendments:  In September 2019, the IASB issued amendments to IFRS 9, IAS 39 and IFRS 7 on ‘Interest Rate Benchmark Reform’ (phase 1). The EU endorsed these amendments in January 2020 and they apply for annual reporting periods beginning on or after 1 January 2020.  In August 2020, the IASB issued amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 on ‘Interest Rate Benchmark Reform’ (phase 2). The EU endorsed these amendments in January 2021 and they apply for annual reporting periods beginning on or after 1 January 2021. Ageas did not early adopt both amendments. The phase 1 amendments deal with potential issues in the period preceding the replacement of the actual interest rate benchmarks with alternative rates, while the phase 2 amendments deal with potential replacement issues. The amendments provide (mandatory) temporary reliefs from applying specific hedge accounting requirements to hedging relationships that are directly affected by uncertainties related to the interest rate benchmark reform. The existing hedging relationships can continue to exist during the period of uncertainty caused by the reform. Furthermore, the amendments provide a practical expedient for situations where the transition from the actual interest rate benchmark into an alternative benchmark results in changes in the contractual cash flows of financial assets, liabilities or leases. The practical expedient enables entities not to derecognise those assets or liabilities and to treat the changes to cash flows, that are directly required by the reform, as changes to a floating interest rate, equivalent to a movement in a market rate or interest. As at 31 December 2021, a notional amount of hedging relationships linked to the EURIBOR for EUR 849 million and a principal amount of subordinated liabilities with a floating coupon rate linked to the EURIBOR for EUR 442.8 million are included in these Consolidated Financial Statements. In 2019, the EURIBOR has been reformed to a hybrid methodology and the Financial Services and Markets Authority (FSMA) authorised the European Money Markets Institute (EMMI) as administrator of the EURIBOR benchmark, implying that the EURIBOR may be used in a foreseeable future by EU supervised entities. As from January 2022, the European Securities and Market Authority (ESMA) will substitute the FSMA as supervisor of the EURIBOR. The ESMA already confirmed in September 2020 that the discontinuation of the EURIBOR is not part of its plans. Ageas monitors the developments regarding the interest rate benchmark reform. Because the EURIBOR may be discontinued one day, fallbacks are introduced in new contracts and Ageas monitors the impact on on- going contracts, to ensure the continuity of the contracts in the unlikely scenario of discontinuation of the EURIBOR. As at 31 December 2021, the amendments had no impact on the consolidated statement of financial position or income statement of Ageas. Covid-19-related rent concessions – Amendments to IFRS 16 Ageas applies IFRS 16 ‘Leases’, as issued by the IASB in January 2016 and endorsed by the EU in November 2017, since 1 January 2019. As a result of the Covid-19 pandemic, lessors may have provided rent concessions to lessees. Rent concessions include rent holidays or rent reductions for a period of time, possibly followed by increased rent payments in future periods. To deal with rent concessions that are provided as a consequence of the Covid-19 pandemic, the IASB issued in May 2020 amendments to IFRS 16 ‘Covid-19-related rent concessions’. The EU endorsed these amendments in October 2020. These amendments provide lessees a practical expedient not to assess whether Covid-19-related rent concessions, that reduce lease payments due on or before 30 June 2021, are a lease modification. As lessee, Ageas did not benefit from Covid-19-related rent concessions, that would result in a lease modification. Consequently, the amendments to IFRS 16 had no impact on the consolidated statement of financial position or income statement of Ageas. Given the ongoing Covid-19 pandemic, the IASB issued in March 2021 an amendment to extend the practical expedient above for rent concessions that reduce lease payments due on or before 30 June 2022. The EU endorsed this extension in August 2021. Considering that Ageas did not benefit from Covid-19-related concessions, this extension did not and is not expected to have an impact on the consolidated statement of financial position or income statement of Ageas. 95 Ageas Annual Report 2021 96 | 240 2.2.2 Upcoming changes in IFRS Standards The following new or revised IFRS standards, interpretations and amendments to IFRS standards and interpretations will become effective for annual reporting periods beginning on 1 January 2022 or later. Ageas has not early adopted any IFRS standard, interpretation or amendment that has been issued but is not yet effective. Extension of the temporary exemption from applying IFRS 9 – Amendments to IFRS 4 The IASB issued IFRS 9 ‘Financial instruments’ in July 2014 and the EU endorsed IFRS 9 in November 2016. Although IFRS 9 applies for annual reporting periods beginning on or after 1 January 2018, Ageas continues to apply IAS 39 ‘Financial instruments – recognition and measurement’. Ageas will apply IFRS 9 for the first time as from 1 January 2023. The reasons behind this derogation are explained below. Together with the issuance of amendments to IFRS 17 in June 2020, the IASB issued amendments to IFRS 4 ‘Extension of the temporary exemption from applying IFRS 9’, to confirm that insurers can apply both IFRS 9 ‘Financial instruments’ and IFRS 17 ‘Insurance contracts’ at the same time. The EU endorsed these amendments to IFRS 4 in December 2020. The amendments to IFRS 4 foresee in two options to minimise the effect of the different effective dates of IFRS 9 and IFRS 17. These options are the overlay approach and the temporary exemption from applying IFRS 9. The temporary exemption from applying IFRS 9 is an optional temporary exemption from applying IFRS 9 no later than reporting periods beginning on or after 1 January 2023 for entities whose activities are predominantly connected with issuing contracts within the scope of IFRS 4. Ageas performed such a predominance analysis at the reference date of 31 December 2015 and concluded being eligible to apply the temporary exemption from applying IFRS 9. This means that:  The carrying amount of Ageas’ liabilities arising from contracts within the scope of IFRS 4 are significant compared to the total carrying amount of all the liabilities of Ageas; and  The percentage of the total carrying amount of Ageas’ liabilities connected with insurance relative to the total carrying amount of all the liabilities of Ageas is greater than 90 per cent. No reassessment of this analysis has been performed at a subsequent date because there were no substantial changes in the business of Ageas that would require such a reassessment. Because Ageas is eligible to apply the temporary exemption from applying IFRS 9, Ageas decided to do so and to align the effective dates of IFRS 9 and IFRS 17. In the meanwhile, a combined implementation project on the implementation of IFRS 9 and IFRS 17 is ongoing at Ageas. This combined implementation projects takes into account the amendments to IFRS 17 on ‘Initial application of IFRS 17 and IFRS 9 – comparative information’, as published by the IASB in December 2021. Because Ageas decided to apply the temporary exemption from applying IFRS 9, Ageas discloses following information on fair value disclosure and credit risk exposure, in order to facilitate the comparison between the Consolidated Financial Statements of Ageas and the financial statements of other companies applying IFRS 9. Amount of change Fair Value at 31 December 2021 Fair Value at 31 December 2020 in fair value in 2021 Do meet Do not meet Do meet Do not meet Do meet Do not meet Fair value of financial assets (in Euro million) SPPI-test SPPI-test SPPI-test SPPI-test SPPI-test SPPI-test Cash and cash equivalents 1,900 38 2,177 64 (277) (26) Debt securities, incl. structured notes 55,905 127 61,038 167 (5,133) (40) Equity securities and other investments 5,669 4,875 794 Derivatives held for trading 6 16 (10) Derivatives for hedging purposes 34 3 31 Loans 15,155 297 14,338 597 817 (300) Investments related to unit linked 18,899 17,088 1,811 Other receivables 802 858 (56) 97 | 240 Loss allowance is measured At an amount equal to lifetime ECL Significantly Credit-impaired at Trade & other Gross carrying amount applying increased the reporting date receivables Purchased or IAS 39 for financial assets that At an amount credit risk since but not purchased measured originated meet the SPPI test as per equal to 12- initial recognition but or originated in accordance credit-impaired 31 December 2021 month ECL not credit-impaired credit-impaired with IFRS 9 §5.5.15 financial assets AAA 5,289 AA 30,991 A 13,749 BBB 14,565 Total investment grade 64,594 Below investment grade 296 78 26 Unrated 4,832 4 18 952 26 Total 69,722 82 44 952 26 Loss allowance is measured At an amount equal to lifetime ECL Significantly Credit-impaired at Trade & other Gross carrying amount applying increased the reporting date receivables Purchased or IAS 39 for financial assets that At an amount credit risk since but not purchased measured originated meet the SPPI test as per equal to 12- initial recognition but or originated in accordance credit-impaired 31 December 2020 month ECL not credit-impaired credit-impaired with IFRS 9 §5.5.15 financial assets AAA 5,722 AA 34,102 A 12,615 BBB 15,195 Total investment grade 67,634 Below investment grade 570 123 30 Unrated 4,985 6 20 916 47 Total 73,190 129 50 916 47 Gross carrying amount applying IAS 39 and fair value for financial assets that meet the SPPI test and that do not have a low credit risk as per 31 December 2021 Gross carrying amount applying IAS 39 1,357 Fair value 1,326 Difference 31 IAS 28 ‘Investments in associates and joint ventures’ requires an entity to apply uniform accounting policies when using the equity method. Ageas has temporarily derogated from this rule for its associate Maybank Ageas Holdings Berhad. This associate applies IFRS 9 since 2018, while Ageas applied the temporary exemption from applying IFRS 9 over the same reporting periods. This derogation from applying uniform accounting policies is permitted by paragraph 39I of the amendments to IFRS 4 on ‘Extension of the temporary exemption from applying IFRS 9’. The financial statements of Maybank Ageas Holdings Berhad can be found on following website: (https://www.etiqa.com.my/v2/about-us/financial-report). IFRS 17 Insurance contracts The IASB issued IFRS 17 ‘Insurance contracts’ in May 2017 and amended IFRS 17 in June 2020. IFRS 17 applies for annual reporting periods beginning on or after 1 January 2023, which is the date as from when Ageas will apply IFRS 17. The EU endorsed IFRS 17, including the June 2020 amendments, in November 2021. This endorsement includes a European carve-out of the annual cohort requirement in IFRS 17 for groups of insurance contracts with direct participating features and groups of investment contracts with discretionary participation features and with cash flows that affect or are affected by cash flows to policyholders of other contracts. GENERAL NOTES 96 Ageas Annual Report 2021 96 | 240 2.2.2 Upcoming changes in IFRS Standards The following new or revised IFRS standards, interpretations and amendments to IFRS standards and interpretations will become effective for annual reporting periods beginning on 1 January 2022 or later. Ageas has not early adopted any IFRS standard, interpretation or amendment that has been issued but is not yet effective. Extension of the temporary exemption from applying IFRS 9 – Amendments to IFRS 4 The IASB issued IFRS 9 ‘Financial instruments’ in July 2014 and the EU endorsed IFRS 9 in November 2016. Although IFRS 9 applies for annual reporting periods beginning on or after 1 January 2018, Ageas continues to apply IAS 39 ‘Financial instruments – recognition and measurement’. Ageas will apply IFRS 9 for the first time as from 1 January 2023. The reasons behind this derogation are explained below. Together with the issuance of amendments to IFRS 17 in June 2020, the IASB issued amendments to IFRS 4 ‘Extension of the temporary exemption from applying IFRS 9’, to confirm that insurers can apply both IFRS 9 ‘Financial instruments’ and IFRS 17 ‘Insurance contracts’ at the same time. The EU endorsed these amendments to IFRS 4 in December 2020. The amendments to IFRS 4 foresee in two options to minimise the effect of the different effective dates of IFRS 9 and IFRS 17. These options are the overlay approach and the temporary exemption from applying IFRS 9. The temporary exemption from applying IFRS 9 is an optional temporary exemption from applying IFRS 9 no later than reporting periods beginning on or after 1 January 2023 for entities whose activities are predominantly connected with issuing contracts within the scope of IFRS 4. Ageas performed such a predominance analysis at the reference date of 31 December 2015 and concluded being eligible to apply the temporary exemption from applying IFRS 9. This means that:  The carrying amount of Ageas’ liabilities arising from contracts within the scope of IFRS 4 are significant compared to the total carrying amount of all the liabilities of Ageas; and  The percentage of the total carrying amount of Ageas’ liabilities connected with insurance relative to the total carrying amount of all the liabilities of Ageas is greater than 90 per cent. No reassessment of this analysis has been performed at a subsequent date because there were no substantial changes in the business of Ageas that would require such a reassessment. Because Ageas is eligible to apply the temporary exemption from applying IFRS 9, Ageas decided to do so and to align the effective dates of IFRS 9 and IFRS 17. In the meanwhile, a combined implementation project on the implementation of IFRS 9 and IFRS 17 is ongoing at Ageas. This combined implementation projects takes into account the amendments to IFRS 17 on ‘Initial application of IFRS 17 and IFRS 9 – comparative information’, as published by the IASB in December 2021. Because Ageas decided to apply the temporary exemption from applying IFRS 9, Ageas discloses following information on fair value disclosure and credit risk exposure, in order to facilitate the comparison between the Consolidated Financial Statements of Ageas and the financial statements of other companies applying IFRS 9. Amount of change Fair Value at 31 December 2021 Fair Value at 31 December 2020 in fair value in 2021 Do meet Do not meet Do meet Do not meet Do meet Do not meet Fair value of financial assets (in Euro million) SPPI-test SPPI-test SPPI-test SPPI-test SPPI-test SPPI-test Cash and cash equivalents 1,900 38 2,177 64 (277) (26) Debt securities, incl. structured notes 55,905 127 61,038 167 (5,133) (40) Equity securities and other investments 5,669 4,875 794 Derivatives held for trading 6 16 (10) Derivatives for hedging purposes 34 3 31 Loans 15,155 297 14,338 597 817 (300) Investments related to unit linked 18,899 17,088 1,811 Other receivables 802 858 (56) 97 | 240 Loss allowance is measured At an amount equal to lifetime ECL Significantly Credit-impaired at Trade & other Gross carrying amount applying increased the reporting date receivables Purchased or IAS 39 for financial assets that At an amount credit risk since but not purchased measured originated meet the SPPI test as per equal to 12- initial recognition but or originated in accordance credit-impaired 31 December 2021 month ECL not credit-impaired credit-impaired with IFRS 9 §5.5.15 financial assets AAA 5,289 AA 30,991 A 13,749 BBB 14,565 Total investment grade 64,594 Below investment grade 296 78 26 Unrated 4,832 4 18 952 26 Total 69,722 82 44 952 26 Loss allowance is measured At an amount equal to lifetime ECL Significantly Credit-impaired at Trade & other Gross carrying amount applying increased the reporting date receivables Purchased or IAS 39 for financial assets that At an amount credit risk since but not purchased measured originated meet the SPPI test as per equal to 12- initial recognition but or originated in accordance credit-impaired 31 December 2020 month ECL not credit-impaired credit-impaired with IFRS 9 §5.5.15 financial assets AAA 5,722 AA 34,102 A 12,615 BBB 15,195 Total investment grade 67,634 Below investment grade 570 123 30 Unrated 4,985 6 20 916 47 Total 73,190 129 50 916 47 Gross carrying amount applying IAS 39 and fair value for financial assets that meet the SPPI test and that do not have a low credit risk as per 31 December 2021 Gross carrying amount applying IAS 39 1,357 Fair value 1,326 Difference 31 IAS 28 ‘Investments in associates and joint ventures’ requires an entity to apply uniform accounting policies when using the equity method. Ageas has temporarily derogated from this rule for its associate Maybank Ageas Holdings Berhad. This associate applies IFRS 9 since 2018, while Ageas applied the temporary exemption from applying IFRS 9 over the same reporting periods. This derogation from applying uniform accounting policies is permitted by paragraph 39I of the amendments to IFRS 4 on ‘Extension of the temporary exemption from applying IFRS 9’. The financial statements of Maybank Ageas Holdings Berhad can be found on following website: (https://www.etiqa.com.my/v2/about-us/financial-report). IFRS 17 Insurance contracts The IASB issued IFRS 17 ‘Insurance contracts’ in May 2017 and amended IFRS 17 in June 2020. IFRS 17 applies for annual reporting periods beginning on or after 1 January 2023, which is the date as from when Ageas will apply IFRS 17. The EU endorsed IFRS 17, including the June 2020 amendments, in November 2021. This endorsement includes a European carve-out of the annual cohort requirement in IFRS 17 for groups of insurance contracts with direct participating features and groups of investment contracts with discretionary participation features and with cash flows that affect or are affected by cash flows to policyholders of other contracts. 97 Ageas Annual Report 2021 98 | 240 IFRS 17 is a comprehensive new accounting standard for insurance contracts, reinsurance contracts and investment contracts with discretionary participation features, covering recognition and measurement, presentation and disclosure of new and in-force groups of contracts. As from 1 January 2023, IFRS 17 will replace the current standard IFRS 4 ‘Insurance contracts', issued in 2005. The IASB expects that IFRS 17 will result in a more consistent accounting of insurance contracts, reinsurance contracts and investment contracts with discretionary participation features compared to IFRS 4, which is largely based on grandfathering previous local accounting policies. IFRS 17 introduces a current value accounting model for insurance contracts, reinsurance contracts and investment contracts with discretionary participation features. The main features of this new accounting model are as follows:  Measurement of the present value of future cash flows, incorporating an explicit risk adjustment for non-financial risk, remeasured at every reporting period (the fulfilment cash flows);  A Contractual Service Margin (CSM), deferring any day one gain in the fulfilment cash flows of a group of insurance contracts, representing the unearned profitability of the contracts, which is recognised in the income statement over the period services are provided (i.e. coverage period);  Certain changes in the expected present value of future cash flows are adjusted against the CSM and thereby recognised in the income statement over the remaining period during which services are provided;  The effect of changes in discount rates will be reported either in the income statement either partly in the income statement and partly in equity (other comprehensive income), depending on the entity’s accounting policy choice;  A simplified Premium Allocation Approach (PAA) may be applied for contracts that meet specific conditions, such as for instance a coverage period of one year or less;  For insurance contract with direct participation features, the general measurement model is modified into a Variable Fee Approach (VFA), by adjusting the CSM with changes in financial variables that adjust the variable fee;  The presentation of insurance revenue and insurance service expenses in the statement of comprehensive income is based on the concept of services provided during the reporting period;  Amounts that the policyholders will always receive, regardless of whether an insured event happens (non-distinct investment components), are not presented in the income statement but are recognised directly on the statement of financial position;  Increased transparency about the profitability of insurance contracts: insurance service results are presented separately from insurance finance income or expense; and  Extensive disclosures will provide information on the recognised amounts from insurance contracts and on the nature and extent of risks arising from these contracts. Given the same application date of IFRS 9 ‘Financial instruments’ and IFRS 17 ‘Insurance contracts’, a combined implementation project is ongoing at Ageas. The implementation of both standards will result in a significant change to the accounting policies, to the presentation in the consolidated financial statements of Ageas and will affect the reported shareholder’s equity, net result and other comprehensive income. Considering the ongoing implementation project, it is currently not yet possible to reliably quantify the impact of both standards on the consolidated financial statements of Ageas. Other changes in IFRS standards Other forthcoming changes in IFRS standards, interpretations and amendments to IFRS standards and interpretations, that will become effective on 1 January 2022 or later, are not expected to affect the consolidated statement of financial position or income statement of Ageas in a significant way. Not all of those changes have already been endorsed by the EU. Those changes relate to:  Amendments to IAS 1 ‘Classification of liabilities as current or non- current’;  Amendments to IAS 1 and IFRS practice statement 2 ‘Disclosure of accounting policies’;  Amendments to IAS 8 ‘Definition of accounting estimates’;  Amendments to IAS 12 ‘Deferred tax related to assets and liabilities arising from a single transaction’;  Amendments to IAS 16 ‘Property, plant and equipment: proceeds before intended use’;  Amendments to IAS 37 ‘Onerous contracts – cost of fulfilling a contract’;  Amendments to IFRS 3 ‘References to the Conceptual Framework’; and  Annual improvements to IFRS standards (2018-2020 cycle): amendments to IFRS 1 ‘First-time adoption of IFRS standards’, amendments to IFRS 9 ‘Financial instruments’, amendments to illustrative examples accompanying IFRS 16 ‘Leases’ and amendments to IAS 41 ‘Agriculture’. 99 | 240 2.3 Accounting estimates The preparation of the Ageas Consolidated Financial Statements requires the use of certain judgements, estimates and assumptions that affect the reported amounts of assets and liabilities as well as the reported amounts of revenues and expenses during the reporting period. Each estimate by its nature carries a significant risk of material adjustment (positive or negative) to the carrying amounts of assets and liabilities during the next financial year. Although the uncertain outlook concerning the short, medium and long- term impact of the Covid-19 pandemic decreased compared to 2020, the judgements, estimates and assumptions used remain subject to increased uncertainty. Consequently, actual amounts may differ from previous estimates and assumptions. Estimates and underlying assumptions have been reviewed, in particular as concerns fair values of (non-quoted) financial assets and liabilities measured using a valuation technique (level 2 or 3), fair values of investment property and property, plant and equipment, deferred tax assets, insurance liabilities, hedge accounting, measurement of recoverable amounts of financial assets, associates and goodwill. The table below includes the estimation uncertainty of the key judgements, estimates and assumptions: Assets Financial instruments  Level 2: - The valuation model - Inactive markets  Level 3: - The valuation model - The use of non-market observable input - Inactive markets Investment property:  The determination of the useful life and residual value Loans:  The valuation model  The use of parameters such as credit spread, maturity and interest rates Associates:  Uncertainties depending on the asset mix, operations and market developments Goodwill impairment testing:  The valuation model  Financial and economic variables  The discount rate used  The inherent risk premium of the entity Other intangible assets:  The determination of the useful life and residual value Deferred tax assets:  Interpretation of tax regulations  Amount and timing of future taxable income Liabilities Insurance contract liabilities  Life: - The actuarial assumptions used - The yield curve used in the Liability Adequacy Test (LAT-test) - The reinvestment profile of the investment portfolio, credit risk spread and maturity, when determining the shadow LAT adjustment  Non-life: - The expected ultimate cost of claims reported at the reporting period - The expected ultimate cost of claims incurred but not yet reported at the reporting date - Claim adjustment expenses Pension obligations:  The actuarial assumptions used  The discount rate used  Inflation and salary evolutions Provisions:  The likelihood of a present obligation due to events in the past  The calculation of the best estimated amount Deferred tax liabilities:  Interpretation of tax regulations  Amount and timing of future taxable income The notes to these Consolidated Financial Statements provide a detailed description on the application of these estimates and assumptions and their effect on the reported figures. Note 4 ‘Risk Management’ of these Consolidated Financial Statements describes the way Ageas mitigates the various risks of the insurance operations. GENERAL NOTES 98 Ageas Annual Report 2021 98 | 240 IFRS 17 is a comprehensive new accounting standard for insurance contracts, reinsurance contracts and investment contracts with discretionary participation features, covering recognition and measurement, presentation and disclosure of new and in-force groups of contracts. As from 1 January 2023, IFRS 17 will replace the current standard IFRS 4 ‘Insurance contracts', issued in 2005. The IASB expects that IFRS 17 will result in a more consistent accounting of insurance contracts, reinsurance contracts and investment contracts with discretionary participation features compared to IFRS 4, which is largely based on grandfathering previous local accounting policies. IFRS 17 introduces a current value accounting model for insurance contracts, reinsurance contracts and investment contracts with discretionary participation features. The main features of this new accounting model are as follows:  Measurement of the present value of future cash flows, incorporating an explicit risk adjustment for non-financial risk, remeasured at every reporting period (the fulfilment cash flows);  A Contractual Service Margin (CSM), deferring any day one gain in the fulfilment cash flows of a group of insurance contracts, representing the unearned profitability of the contracts, which is recognised in the income statement over the period services are provided (i.e. coverage period);  Certain changes in the expected present value of future cash flows are adjusted against the CSM and thereby recognised in the income statement over the remaining period during which services are provided;  The effect of changes in discount rates will be reported either in the income statement either partly in the income statement and partly in equity (other comprehensive income), depending on the entity’s accounting policy choice;  A simplified Premium Allocation Approach (PAA) may be applied for contracts that meet specific conditions, such as for instance a coverage period of one year or less;  For insurance contract with direct participation features, the general measurement model is modified into a Variable Fee Approach (VFA), by adjusting the CSM with changes in financial variables that adjust the variable fee;  The presentation of insurance revenue and insurance service expenses in the statement of comprehensive income is based on the concept of services provided during the reporting period;  Amounts that the policyholders will always receive, regardless of whether an insured event happens (non-distinct investment components), are not presented in the income statement but are recognised directly on the statement of financial position;  Increased transparency about the profitability of insurance contracts: insurance service results are presented separately from insurance finance income or expense; and  Extensive disclosures will provide information on the recognised amounts from insurance contracts and on the nature and extent of risks arising from these contracts. Given the same application date of IFRS 9 ‘Financial instruments’ and IFRS 17 ‘Insurance contracts’, a combined implementation project is ongoing at Ageas. The implementation of both standards will result in a significant change to the accounting policies, to the presentation in the consolidated financial statements of Ageas and will affect the reported shareholder’s equity, net result and other comprehensive income. Considering the ongoing implementation project, it is currently not yet possible to reliably quantify the impact of both standards on the consolidated financial statements of Ageas. Other changes in IFRS standards Other forthcoming changes in IFRS standards, interpretations and amendments to IFRS standards and interpretations, that will become effective on 1 January 2022 or later, are not expected to affect the consolidated statement of financial position or income statement of Ageas in a significant way. Not all of those changes have already been endorsed by the EU. Those changes relate to:  Amendments to IAS 1 ‘Classification of liabilities as current or non- current’;  Amendments to IAS 1 and IFRS practice statement 2 ‘Disclosure of accounting policies’;  Amendments to IAS 8 ‘Definition of accounting estimates’;  Amendments to IAS 12 ‘Deferred tax related to assets and liabilities arising from a single transaction’;  Amendments to IAS 16 ‘Property, plant and equipment: proceeds before intended use’;  Amendments to IAS 37 ‘Onerous contracts – cost of fulfilling a contract’;  Amendments to IFRS 3 ‘References to the Conceptual Framework’; and  Annual improvements to IFRS standards (2018-2020 cycle): amendments to IFRS 1 ‘First-time adoption of IFRS standards’, amendments to IFRS 9 ‘Financial instruments’, amendments to illustrative examples accompanying IFRS 16 ‘Leases’ and amendments to IAS 41 ‘Agriculture’. 99 | 240 2.3 Accounting estimates The preparation of the Ageas Consolidated Financial Statements requires the use of certain judgements, estimates and assumptions that affect the reported amounts of assets and liabilities as well as the reported amounts of revenues and expenses during the reporting period. Each estimate by its nature carries a significant risk of material adjustment (positive or negative) to the carrying amounts of assets and liabilities during the next financial year. Although the uncertain outlook concerning the short, medium and long- term impact of the Covid-19 pandemic decreased compared to 2020, the judgements, estimates and assumptions used remain subject to increased uncertainty. Consequently, actual amounts may differ from previous estimates and assumptions. Estimates and underlying assumptions have been reviewed, in particular as concerns fair values of (non-quoted) financial assets and liabilities measured using a valuation technique (level 2 or 3), fair values of investment property and property, plant and equipment, deferred tax assets, insurance liabilities, hedge accounting, measurement of recoverable amounts of financial assets, associates and goodwill. The table below includes the estimation uncertainty of the key judgements, estimates and assumptions: Assets Financial instruments  Level 2: - The valuation model - Inactive markets  Level 3: - The valuation model - The use of non-market observable input - Inactive markets Investment property:  The determination of the useful life and residual value Loans:  The valuation model  The use of parameters such as credit spread, maturity and interest rates Associates:  Uncertainties depending on the asset mix, operations and market developments Goodwill impairment testing:  The valuation model  Financial and economic variables  The discount rate used  The inherent risk premium of the entity Other intangible assets:  The determination of the useful life and residual value Deferred tax assets:  Interpretation of tax regulations  Amount and timing of future taxable income Liabilities Insurance contract liabilities  Life: - The actuarial assumptions used - The yield curve used in the Liability Adequacy Test (LAT-test) - The reinvestment profile of the investment portfolio, credit risk spread and maturity, when determining the shadow LAT adjustment  Non-life: - The expected ultimate cost of claims reported at the reporting period - The expected ultimate cost of claims incurred but not yet reported at the reporting date - Claim adjustment expenses Pension obligations:  The actuarial assumptions used  The discount rate used  Inflation and salary evolutions Provisions:  The likelihood of a present obligation due to events in the past  The calculation of the best estimated amount Deferred tax liabilities:  Interpretation of tax regulations  Amount and timing of future taxable income The notes to these Consolidated Financial Statements provide a detailed description on the application of these estimates and assumptions and their effect on the reported figures. Note 4 ‘Risk Management’ of these Consolidated Financial Statements describes the way Ageas mitigates the various risks of the insurance operations. 99 Ageas Annual Report 2021 100 | 240 2.4 Events after the reporting period Events after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the Ageas Consolidated Financial Statements are authorised for issue by the Board of Ageas. Two types of events can be identified:  Events that provide evidence of conditions that existed at the end of the reporting period, that result in an adjustment of the amounts recognised in these Consolidated Financial Statements; and  Events that are indicative of conditions that arose after the reporting period, that do not result in an adjustment of the amounts recognised in these Consolidated Financial Statements, but of which the nature and an estimate of its financial effect, or a statement that such an estimate cannot be made, is disclosed. An overview of events after the reporting period is included in note 44 ‘Events after the date of the statement of financial position’ of these Consolidated Financial Statements. 2.5 Information on operating segments Ageas’ reportable operating segments are primarily based on geographical areas. The regional split is based on the fact that the activities in these areas share the same nature and economic characteristics and are managed as such. Ageas’ operating segments are:  Belgium;  United Kingdom (UK);  Continental Europe;  Asia;  Reinsurance; and  General account. Activities not related to insurance and group elimination differences are reported separately from the core insurance activities. Those non- insurance activities are reported in the operating segment ‘General account’, which includes items such as group financing and other holding activities. In addition, the operating segment ‘General account’ also includes the investment in Royal Park Investments and the liabilities related to CASHES/RPN(I). Transactions or transfers between the operating segments occur under normal commercial terms and conditions that would be available to unrelated third parties. Eliminations are reported separately. 2.6 Consolidation principles The Ageas Consolidated Financial Statements include the financial statements of ageas SA/NV (the parent company) and its subsidiaries. Business combinations Business combinations are accounted for using the acquisition method, when the set of acquired activities and assets meet the definition of a business and control is transferred to Ageas. For the acquisition to be considered a business, the acquired set of activities and assets shall include an input and a substantive process applied to the input, that together significantly contribute to the ability to create outputs. The acquired process is substantive if it is critical to the ability to develop or convert an acquired input into output or if it is critical to the ability to continue producing outputs. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at the fair value at acquisition date and the amount of any non-controlling interest in the acquiree. For each business combination, Ageas has an option to measure any non- controlling interests in the acquiree either at fair value or at the non- controlling interest’s proportionate share of the acquiree’s identifiable net assets. If the business combination is achieved in stages, the previously held equity interest in the acquiree is remeasured at the fair value at acquisition date and any resulting gain or loss is recognised in profit or loss. Subsidiaries Subsidiaries are those entities over which Ageas, either directly or indirectly, has the power to govern the financial and operating policies to obtain benefits from the activities (‘control’). In assessing whether Ageas controls another entity, the existence and effect of potential voting rights that are substantive in nature, presently exercisable or presently convertible, are considered. Subsidiaries are consolidated as of the date on which effective control is transferred to Ageas and are no longer consolidated from the date on which control ceases. Subsidiaries acquired exclusively with a view to resale are accounted for as non-current assets held for sale. Intercompany transactions (balances and gains or losses on transactions between Ageas companies) are eliminated. 101 | 240 Sale of a portion of ownership interest in a subsidiary Gains or losses on the sale of a portion of ownership interest in a subsidiary are recognised as following:  If there is no loss of control, the transaction is accounted for as an equity transaction (i.e. transaction with owners in their capacity as owner); or  If there is a loss of control, the transaction is accounted for in the income statement, calculated on the total participation. Any interest retained in the former subsidiary is measured at fair value at the time of loss of control. However, if the loss of control results from a non-monetary contribution of a subsidiary to an associate or joint venture, the gain or loss is recognised only to the extent of the portion of ownership interest that has been transferred to other investors, resulting in a partial gain recognition. Associates Investments in associates are those investments over which Ageas has a significant influence, i.e. power to participate in the financial and operating policy decisions of the investee, but is not in control or joint control. Investments in associates are accounted for using the equity method. At initial recognition, the investment is recognised at cost, which includes transaction costs. At subsequent measurement, the share of net income for the year is recognised in the income statement as ‘Share in result of associates’. Ageas’ share in the associate’s post-acquisition direct equity movements is recognised in equity (other comprehensive income). Distributions received from associates reduce the carrying amount of the investment. Interests in joint ventures, whereby joint control of an arrangement provides Ageas rights to the net assets of that joint arrangement, are accounted for as investments in associates. Gains on transactions between Ageas and investments accounted for using the equity method are eliminated to the extent of Ageas’ interest. Losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Losses are recognised until the carrying amount of the investment is reduced to zero. Additional losses are only recognised to the extent that Ageas has incurred legal or constructive obligations or made payments on behalf of an associate. For long-term interests (e.g. inter-company loans) in an associate or joint venture that form part of the net investment in the associate or joint venture, but to which the equity method is not applied, IAS 39 is applied. Disposal of subsidiaries, businesses and non-current assets A non-current asset (or disposal group, such as subsidiaries) is classified as ‘held for sale’ if it is available for immediate sale in its present condition and if its sale is highly probable. A sale is highly probable if:  There is evidence of management commitment;  There is an active programme to locate a buyer and complete the plan;  The asset is actively marketed for sale at a reasonable price compared to its fair value;  The sale is expected to be completed within 12 months of the date of classification; and  Actions required to complete the plan indicate that it is unlikely that there will be significant changes to the plan or that it will be withdrawn. The probability of shareholder’s approval is considered as part of the assessment of whether the sale is highly probable. If regulatory approval is needed, a sale is only considered to be highly probable after this approval. Non-current assets (or disposal groups) classified as held for sale are:  Measured at the lower of the carrying amount and fair value less costs to sell (except for the assets that are exempt from this rule such as IFRS 4 insurance rights, financial assets, deferred taxes and pension plans);  Current assets and all liabilities are measured in accordance with the applicable IFRS;  Not depreciated or amortised; and  Presented separately in the statement of financial position (assets and liabilities are not offset). The date of disposal of a subsidiary or disposal group is the date on which control passes. The consolidated income statement includes the results of a subsidiary or disposal group up to the date of disposal. The gain or loss on disposal is the difference between a) the proceeds of the sale and b) the carrying amount of the net assets plus any attributable goodwill and amounts accumulated in other comprehensive income (for example, foreign translation adjustments and available-for-sale reserves). A discontinued operation is a part of Ageas that has been disposed of or is classified as held for sale and:  Represents a separate major line of business or geographical area of operations;  Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or  Is a subsidiary acquired exclusively with a view to resale. Results on discontinued operations are presented separately in the income statement. GENERAL NOTES 100 Ageas Annual Report 2021 100 | 240 2.4 Events after the reporting period Events after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the Ageas Consolidated Financial Statements are authorised for issue by the Board of Ageas. Two types of events can be identified:  Events that provide evidence of conditions that existed at the end of the reporting period, that result in an adjustment of the amounts recognised in these Consolidated Financial Statements; and  Events that are indicative of conditions that arose after the reporting period, that do not result in an adjustment of the amounts recognised in these Consolidated Financial Statements, but of which the nature and an estimate of its financial effect, or a statement that such an estimate cannot be made, is disclosed. An overview of events after the reporting period is included in note 44 ‘Events after the date of the statement of financial position’ of these Consolidated Financial Statements. 2.5 Information on operating segments Ageas’ reportable operating segments are primarily based on geographical areas. The regional split is based on the fact that the activities in these areas share the same nature and economic characteristics and are managed as such. Ageas’ operating segments are:  Belgium;  United Kingdom (UK);  Continental Europe;  Asia;  Reinsurance; and  General account. Activities not related to insurance and group elimination differences are reported separately from the core insurance activities. Those non- insurance activities are reported in the operating segment ‘General account’, which includes items such as group financing and other holding activities. In addition, the operating segment ‘General account’ also includes the investment in Royal Park Investments and the liabilities related to CASHES/RPN(I). Transactions or transfers between the operating segments occur under normal commercial terms and conditions that would be available to unrelated third parties. Eliminations are reported separately. 2.6 Consolidation principles The Ageas Consolidated Financial Statements include the financial statements of ageas SA/NV (the parent company) and its subsidiaries. Business combinations Business combinations are accounted for using the acquisition method, when the set of acquired activities and assets meet the definition of a business and control is transferred to Ageas. For the acquisition to be considered a business, the acquired set of activities and assets shall include an input and a substantive process applied to the input, that together significantly contribute to the ability to create outputs. The acquired process is substantive if it is critical to the ability to develop or convert an acquired input into output or if it is critical to the ability to continue producing outputs. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at the fair value at acquisition date and the amount of any non-controlling interest in the acquiree. For each business combination, Ageas has an option to measure any non- controlling interests in the acquiree either at fair value or at the non- controlling interest’s proportionate share of the acquiree’s identifiable net assets. If the business combination is achieved in stages, the previously held equity interest in the acquiree is remeasured at the fair value at acquisition date and any resulting gain or loss is recognised in profit or loss. Subsidiaries Subsidiaries are those entities over which Ageas, either directly or indirectly, has the power to govern the financial and operating policies to obtain benefits from the activities (‘control’). In assessing whether Ageas controls another entity, the existence and effect of potential voting rights that are substantive in nature, presently exercisable or presently convertible, are considered. Subsidiaries are consolidated as of the date on which effective control is transferred to Ageas and are no longer consolidated from the date on which control ceases. Subsidiaries acquired exclusively with a view to resale are accounted for as non-current assets held for sale. Intercompany transactions (balances and gains or losses on transactions between Ageas companies) are eliminated. 101 | 240 Sale of a portion of ownership interest in a subsidiary Gains or losses on the sale of a portion of ownership interest in a subsidiary are recognised as following:  If there is no loss of control, the transaction is accounted for as an equity transaction (i.e. transaction with owners in their capacity as owner); or  If there is a loss of control, the transaction is accounted for in the income statement, calculated on the total participation. Any interest retained in the former subsidiary is measured at fair value at the time of loss of control. However, if the loss of control results from a non-monetary contribution of a subsidiary to an associate or joint venture, the gain or loss is recognised only to the extent of the portion of ownership interest that has been transferred to other investors, resulting in a partial gain recognition. Associates Investments in associates are those investments over which Ageas has a significant influence, i.e. power to participate in the financial and operating policy decisions of the investee, but is not in control or joint control. Investments in associates are accounted for using the equity method. At initial recognition, the investment is recognised at cost, which includes transaction costs. At subsequent measurement, the share of net income for the year is recognised in the income statement as ‘Share in result of associates’. Ageas’ share in the associate’s post-acquisition direct equity movements is recognised in equity (other comprehensive income). Distributions received from associates reduce the carrying amount of the investment. Interests in joint ventures, whereby joint control of an arrangement provides Ageas rights to the net assets of that joint arrangement, are accounted for as investments in associates. Gains on transactions between Ageas and investments accounted for using the equity method are eliminated to the extent of Ageas’ interest. Losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Losses are recognised until the carrying amount of the investment is reduced to zero. Additional losses are only recognised to the extent that Ageas has incurred legal or constructive obligations or made payments on behalf of an associate. For long-term interests (e.g. inter-company loans) in an associate or joint venture that form part of the net investment in the associate or joint venture, but to which the equity method is not applied, IAS 39 is applied. Disposal of subsidiaries, businesses and non-current assets A non-current asset (or disposal group, such as subsidiaries) is classified as ‘held for sale’ if it is available for immediate sale in its present condition and if its sale is highly probable. A sale is highly probable if:  There is evidence of management commitment;  There is an active programme to locate a buyer and complete the plan;  The asset is actively marketed for sale at a reasonable price compared to its fair value;  The sale is expected to be completed within 12 months of the date of classification; and  Actions required to complete the plan indicate that it is unlikely that there will be significant changes to the plan or that it will be withdrawn. The probability of shareholder’s approval is considered as part of the assessment of whether the sale is highly probable. If regulatory approval is needed, a sale is only considered to be highly probable after this approval. Non-current assets (or disposal groups) classified as held for sale are:  Measured at the lower of the carrying amount and fair value less costs to sell (except for the assets that are exempt from this rule such as IFRS 4 insurance rights, financial assets, deferred taxes and pension plans);  Current assets and all liabilities are measured in accordance with the applicable IFRS;  Not depreciated or amortised; and  Presented separately in the statement of financial position (assets and liabilities are not offset). The date of disposal of a subsidiary or disposal group is the date on which control passes. The consolidated income statement includes the results of a subsidiary or disposal group up to the date of disposal. The gain or loss on disposal is the difference between a) the proceeds of the sale and b) the carrying amount of the net assets plus any attributable goodwill and amounts accumulated in other comprehensive income (for example, foreign translation adjustments and available-for-sale reserves). A discontinued operation is a part of Ageas that has been disposed of or is classified as held for sale and:  Represents a separate major line of business or geographical area of operations;  Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or  Is a subsidiary acquired exclusively with a view to resale. Results on discontinued operations are presented separately in the income statement. 101 Ageas Annual Report 2021 102 | 240 2.7 Foreign currency transactions and balances For individual entities of Ageas, foreign currency transactions are accounted for using the exchange rate at the date of the transaction. For monetary items, outstanding balances in foreign currencies at year- end are translated at current exchange rates at the end of the reporting period. Foreign exchange differences arising from monetary assets classified as available-for-sale are recognised in the income statement for the exchange differences resulting from changes in amortised cost. Other fair value gains and losses on those instruments are recognised in equity (other comprehensive income). Non-monetary items measured at historical cost are translated using the historical exchange rate that existed at the date of the transaction. Non- monetary items measured at fair value are translated using the exchange rate at the date that the fair values are determined. The resulting exchange gains or losses are recorded in the income statement as change in foreign currency differences, except for those non-monetary items whose fair value change are recorded as a component of equity. Foreign currency translation Upon consolidation of entities whose functional currency is not denominated in euro, the statement of financial position of those entities is translated using the exchange rates prevailing at the date of the statement of financial position. The income statement and cash flow statement of those entities is translated at the average daily exchange rates for the current year (or exceptionally at the exchange rate at the date of the transaction if exchange rates fluctuate significantly). Translation exchange differences are recognised in equity. On disposal of a foreign entity, such exchange differences are recognised in the income statement as part of the gain or loss on the sale. Exchange differences arising on monetary items, borrowings and other currency instruments, designated as hedges or a net investment in a foreign entity, are recorded in equity, until the disposal of the net investment, except for any hedge ineffectiveness that is immediately recognised in the income statement. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing exchange rate on the date of the statement of financial position. All resulting differences are recognised in equity until disposal of the foreign entity when a recycling to the income statement takes place. The following table shows the exchange rates of the most relevant currencies for Ageas. Rates at Average end of period rates 1 euro = 31 December 2021 31 December 2020 2021 2020 Pound sterling 0.84 0.90 0.86 0.89 US dollar 1.13 1.23 1.18 1.14 Hong Kong dollar 8.83 9.51 9.19 8.86 Turkey lira 15.23 9.11 10.51 8.05 China yuan renminbi 7.19 8.02 7.63 7.87 Indian Rupee 84.23 89.66 87.44 84.64 Malaysia ringgit 4.72 4.93 4.90 4.80 Philippines Peso 57.76 59.13 58.30 56.62 Thailand baht 37.65 36.73 37.84 35.71 Vietnamese Dong 25,989 28,108 27,105 26,450 103 | 240 2.8 Measurement bases used in preparing the financial statements The classification and measurement of assets and liabilities are based on the nature of the underlying transactions. 2.8.1 Financial assets A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Ageas classifies and measures financial assets and financial liabilities based on the nature of the underlying transactions. Classification of financial assets Management determines the appropriate classification of its financial instruments at the acquisition date:  Held-to-maturity: includes debt securities with a fixed maturity of which management has both the intention and the ability to hold the instruments to maturity;  Loans and receivables: includes debt securities with fixed or determinable payments that are not quoted in an active market and that, upon initial recognition, are not designated as held-for- trading nor as available-for-sale;  Available-for-sale: includes securities to be held for an indefinite period of time, which may be sold in response to needs for liquidity or to changes in interest rates, exchange rates or equity prices; and  Financial assets held at fair value through profit or loss;  Held-for-trading: includes securities that are acquired for the purpose of generating short-term profits;  Financial securities designated at fair value through profit or loss. Measurement of financial assets Held-to-maturity investments are measured at amortised cost less any allowances for impairment. Any difference with the fair value at initial recognition, resulting from transaction costs, initial premiums or discounts, is amortised over the life of the investment using the effective interest method. If a held-to-maturity asset is determined to be impaired, the allowance for impairment is recognised in the income statement. Loans and receivables are measured at amortised cost less any allowances for impairment. At initial recognition, loans and receivables are measured at fair value including transaction costs and initial premiums or discounts. Amortised cost is calculated using the effective interest rate method (EIR), taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is recognised in the income statement. Gains and losses are recognised in the income statement when the investments are derecognised or impaired. For floating rate instruments, the cash flows are periodically re- estimated to reflect movements in market interest rates. If the floating rate instrument is initially recognised at an amount (almost) equal to the principal repayable, the re-estimation has no significant effect on the carrying amount of the instrument and there will be no adjustment to the received interest, reported on an accrual basis. However, if a floating rate instrument is acquired at a significant premium or discount, this premium or discount is amortised over the expected life of the instrument and is included in the calculation of the EIR. The carrying amount is recalculated each period by computing the present value of estimated future cash flows at the actual effective interest rate. Any adjustments are recognised in profit or loss. Held-for-trading investments, derivatives and assets designated as held at fair value through profit or loss are measured at fair value. Changes in the fair value are recognised in the income statement. The (realised and unrealised) results are included in ‘Result on sales and revaluations’. Interest received (paid) on assets (liabilities) held for trading is reported as interest income (expense). Dividends received are included in ‘Interest, dividend and other investment income’. The majority of Ageas’ financial investments (being bonds and equity shares) are classified as available-for-sale and are measured at fair value. Changes in fair value are recognised in equity (other comprehensive income) until the investment is sold. At the moment of disposal, the accumulated fair value changes in equity are recycled through the income statement. Revenue on available-for-sale debt securities is recognised using the effective interest method. Periodic amortisation and impairment losses are recognised in the income statement and dividends are recognised as income upon receipt. For those insurance portfolios, where unrealised gains and losses on bonds have a direct impact on the measurement of the insurance liabilities, Ageas applies shadow accounting in accordance with IFRS 4. This means that the changes in the unrealised gains and losses will affect the measurement of the insurance liabilities, implying why those changes will therefore not be part of equity. Impairment of financial assets A financial asset (or group of financial assets) classified as either available-for-sale, loans and receivables or held-to-maturity is deemed to be impaired if:  There is an objective evidence of impairment as a result of one or more loss events or triggers (e.g. significant financial difficulty of the issuer) that have occurred after the initial recognition of the asset; and  That loss event (or events) has (or have) an impact on the estimated future cash flows of the financial asset (or group of financial assets) that can be reliably estimated. GENERAL NOTES 102 Ageas Annual Report 2021 102 | 240 2.7 Foreign currency transactions and balances For individual entities of Ageas, foreign currency transactions are accounted for using the exchange rate at the date of the transaction. For monetary items, outstanding balances in foreign currencies at year- end are translated at current exchange rates at the end of the reporting period. Foreign exchange differences arising from monetary assets classified as available-for-sale are recognised in the income statement for the exchange differences resulting from changes in amortised cost. Other fair value gains and losses on those instruments are recognised in equity (other comprehensive income). Non-monetary items measured at historical cost are translated using the historical exchange rate that existed at the date of the transaction. Non- monetary items measured at fair value are translated using the exchange rate at the date that the fair values are determined. The resulting exchange gains or losses are recorded in the income statement as change in foreign currency differences, except for those non-monetary items whose fair value change are recorded as a component of equity. Foreign currency translation Upon consolidation of entities whose functional currency is not denominated in euro, the statement of financial position of those entities is translated using the exchange rates prevailing at the date of the statement of financial position. The income statement and cash flow statement of those entities is translated at the average daily exchange rates for the current year (or exceptionally at the exchange rate at the date of the transaction if exchange rates fluctuate significantly). Translation exchange differences are recognised in equity. On disposal of a foreign entity, such exchange differences are recognised in the income statement as part of the gain or loss on the sale. Exchange differences arising on monetary items, borrowings and other currency instruments, designated as hedges or a net investment in a foreign entity, are recorded in equity, until the disposal of the net investment, except for any hedge ineffectiveness that is immediately recognised in the income statement. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing exchange rate on the date of the statement of financial position. All resulting differences are recognised in equity until disposal of the foreign entity when a recycling to the income statement takes place. The following table shows the exchange rates of the most relevant currencies for Ageas. Rates at Average end of period rates 1 euro = 31 December 2021 31 December 2020 2021 2020 Pound sterling 0.84 0.90 0.86 0.89 US dollar 1.13 1.23 1.18 1.14 Hong Kong dollar 8.83 9.51 9.19 8.86 Turkey lira 15.23 9.11 10.51 8.05 China yuan renminbi 7.19 8.02 7.63 7.87 Indian Rupee 84.23 89.66 87.44 84.64 Malaysia ringgit 4.72 4.93 4.90 4.80 Philippines Peso 57.76 59.13 58.30 56.62 Thailand baht 37.65 36.73 37.84 35.71 Vietnamese Dong 25,989 28,108 27,105 26,450 103 | 240 2.8 Measurement bases used in preparing the financial statements The classification and measurement of assets and liabilities are based on the nature of the underlying transactions. 2.8.1 Financial assets A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Ageas classifies and measures financial assets and financial liabilities based on the nature of the underlying transactions. Classification of financial assets Management determines the appropriate classification of its financial instruments at the acquisition date:  Held-to-maturity: includes debt securities with a fixed maturity of which management has both the intention and the ability to hold the instruments to maturity;  Loans and receivables: includes debt securities with fixed or determinable payments that are not quoted in an active market and that, upon initial recognition, are not designated as held-for- trading nor as available-for-sale;  Available-for-sale: includes securities to be held for an indefinite period of time, which may be sold in response to needs for liquidity or to changes in interest rates, exchange rates or equity prices; and  Financial assets held at fair value through profit or loss;  Held-for-trading: includes securities that are acquired for the purpose of generating short-term profits;  Financial securities designated at fair value through profit or loss. Measurement of financial assets Held-to-maturity investments are measured at amortised cost less any allowances for impairment. Any difference with the fair value at initial recognition, resulting from transaction costs, initial premiums or discounts, is amortised over the life of the investment using the effective interest method. If a held-to-maturity asset is determined to be impaired, the allowance for impairment is recognised in the income statement. Loans and receivables are measured at amortised cost less any allowances for impairment. At initial recognition, loans and receivables are measured at fair value including transaction costs and initial premiums or discounts. Amortised cost is calculated using the effective interest rate method (EIR), taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is recognised in the income statement. Gains and losses are recognised in the income statement when the investments are derecognised or impaired. For floating rate instruments, the cash flows are periodically re- estimated to reflect movements in market interest rates. If the floating rate instrument is initially recognised at an amount (almost) equal to the principal repayable, the re-estimation has no significant effect on the carrying amount of the instrument and there will be no adjustment to the received interest, reported on an accrual basis. However, if a floating rate instrument is acquired at a significant premium or discount, this premium or discount is amortised over the expected life of the instrument and is included in the calculation of the EIR. The carrying amount is recalculated each period by computing the present value of estimated future cash flows at the actual effective interest rate. Any adjustments are recognised in profit or loss. Held-for-trading investments, derivatives and assets designated as held at fair value through profit or loss are measured at fair value. Changes in the fair value are recognised in the income statement. The (realised and unrealised) results are included in ‘Result on sales and revaluations’. Interest received (paid) on assets (liabilities) held for trading is reported as interest income (expense). Dividends received are included in ‘Interest, dividend and other investment income’. The majority of Ageas’ financial investments (being bonds and equity shares) are classified as available-for-sale and are measured at fair value. Changes in fair value are recognised in equity (other comprehensive income) until the investment is sold. At the moment of disposal, the accumulated fair value changes in equity are recycled through the income statement. Revenue on available-for-sale debt securities is recognised using the effective interest method. Periodic amortisation and impairment losses are recognised in the income statement and dividends are recognised as income upon receipt. For those insurance portfolios, where unrealised gains and losses on bonds have a direct impact on the measurement of the insurance liabilities, Ageas applies shadow accounting in accordance with IFRS 4. This means that the changes in the unrealised gains and losses will affect the measurement of the insurance liabilities, implying why those changes will therefore not be part of equity. Impairment of financial assets A financial asset (or group of financial assets) classified as either available-for-sale, loans and receivables or held-to-maturity is deemed to be impaired if:  There is an objective evidence of impairment as a result of one or more loss events or triggers (e.g. significant financial difficulty of the issuer) that have occurred after the initial recognition of the asset; and  That loss event (or events) has (or have) an impact on the estimated future cash flows of the financial asset (or group of financial assets) that can be reliably estimated. 103 Ageas Annual Report 2021 104 | 240 For equity securities, the triggers used to determine whether there is objective evidence of impairment include, amongst others, the consideration whether the fair value is significantly (25%) below the carrying value or has been below the carrying value for a prolonged period (365 consecutive days) on the date of the statement of financial position. Depending on the type of financial asset, the recoverable amount can be estimated as follows:  The fair value using an observable market price;  The fair value using non-observable market-data; or  Based on the fair value of the collateral. If an available-for-sale asset is determined to be impaired, the allowance for impairment is recognised in the income statement. For impaired available-for-sale assets, unrealised losses previously recognised in equity are transferred to the income statement when the impairment occurs. If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale increases and the increase objectively relates to an event occurring after the recognition of any allowance for impairment in the income statement, the allowance for impairment is reversed, with the amount of the reversal recognised in the income statement. Further positive revaluations of debt instruments classified as available-for-sale appear in other comprehensive income. Impairments on an equity instrument classified as available-for-sale are not reversed through the income statement; increases in their fair value after impairment are recognised directly in other comprehensive income. Trade and settlement date All purchases and sales of financial assets requiring delivery within the timeframe established by regulation or market convention are recognised on the trade date, which is the date when Ageas becomes a party to the contractual provisions of the financial assets. Forward purchases and sales, other than those requiring delivery within the timeframe established by regulation or market convention, are recognised as derivative forward transactions until settlement. Classification and measurement of financial liabilities The IFRS classification of financial liabilities determines their measurement and recognition in the income statement as follows:  Financial liabilities at fair value through profit or loss include: i) Financial liabilities held-for-trading, including derivative instruments that do not qualify for hedge accounting; and ii) Financial liabilities that Ageas has irrevocably designated at initial recognition or at first-time adoption of IFRS as held at fair value through profit or loss, because: - The host contract includes an embedded derivative that would otherwise require separation; - It eliminates or significantly reduces a measurement or recognition inconsistency (‘accounting mismatch’); or - It relates to a group of financial assets and/or liabilities that are managed and of which the performance is evaluated on a fair value basis.  Other financial liabilities are initially recognised at fair value less transaction costs. Subsequently, other financial liabilities are measured at amortised cost using the effective interest method, with the periodic amortisation recorded in the income statement. Subordinated liabilities and borrowings are initially recognised at fair value less transaction costs and are subsequently measured at amortised cost using the effective interest method, with the periodic amortisation recorded in the income statement. Transaction costs Transaction costs on financial instruments refer to the incremental costs directly attributable to the acquisition or disposal of a financial asset or liability. They include fees and commissions paid to agents, advisers, brokers and dealers, levies imposed by regulatory agencies and securities exchanges as well as transfer taxes and duties. Those transaction costs are included in the initial measurement of the financial asset or liability, except if the financial asset or liability is measured at fair value through profit or loss, in which case transaction costs are directly expensed. Fair value of financial instruments The fair value is the amount for which an asset or granted equity instrument could be exchanged and a liability could be settled between knowledgeable, willing parties in an arm’s length transaction. The fair value presented is the ‘clean’ fair value, which is the total fair value or ‘dirty’ fair value less interest accruals and transaction costs. Accrued interest are classified separately. The fair value of a liability or own equity instrument reflects the effect of non-performance risk. Non-performance risk includes, but may not be limited to, the entity’s own risk. An asset or liability is initially measured at fair value. If the transaction price differs from this fair value, the resulting gain or loss is recognised in the income statement unless IFRS specify otherwise. 105 | 240 The basic principles used for estimating fair value are as follows:  Maximisation of the use or relevant observable (market) inputs and minimisation of the use of unobservable inputs (such as internal estimates and assumptions);  Only change in estimating techniques if an improvement can be demonstrated or if a change is necessary because of changes in market conditions or in the availability of information. In determining the fair value, following hierarchy for determining and disclosing the fair value is used, in the order listed:  Level 1: fair values measured using (unadjusted) quoted prices in an active market for identical assets or liabilities, which means that quoted prices are readily available and reflect actual and regularly occurring market transactions on an arm’s length basis;  Level 2: fair values measured using inputs other than quoted prices included in level 1 that are observable (in the market), either directly (i.e. prices) or indirectly (i.e. derived from prices, such as interest or exchange rates);  Level 3: fair values measured using inputs that are not (completely) based on observable data;  Cost. The level in the fair value hierarchy within which the fair value measurement is categorised is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Level 2 and level 3 fair value measurements usually require the use of valuation techniques. A financial instrument is regarded as quoted in an active market when quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices reflect actual and regularly occurring market transactions on an arm’s length basis. When a financial instrument is traded in an active and liquid market, its quoted market price or value provides the best evidence of its fair value. No adjustment is made to the fair value of large holdings of shares, unless there is a binding agreement to sell the shares at a price other than the market price. The appropriate quoted market price for an asset held or a liability to be issued is the current bid price, and for an asset to be acquired or a liability held, the ask price. Mid-market prices are used as a basis for establishing the fair value of assets and liabilities with offsetting market risks. If there is a significant decrease in the volume or level of activity for the asset or liability, the transactions or quoted prices are reviewed and an alternative valuation technique or multiple valuation techniques (e.g. present value techniques) may be applied. If no active market price is available, fair values are estimated using present value or other valuation techniques based on market observable inputs, existing at the reporting date. Inputs can be either directly observable (i.e. prices) or indirectly observable (i.e. derived from prices, such as interest or exchange rates). When Ageas uses quantitative unobservable inputs in measuring fair value, those are not developed in house. If there is a valuation technique commonly used by market participants to price an instrument and that valuation technique demonstrated to provide reliable estimates of prices obtained in actual market transactions, Ageas applies that valuation technique. Well established valuation techniques in financial markets include recent market transactions, discounted cash flows (including option-pricing models) and current replacement cost. An acceptable valuation technique incorporates all factors that market participants would consider when setting a price, and should be consistent with accepted economic methodologies for pricing financial instruments. These techniques are subject to inherent limitations, such as estimation of the appropriate risk- adjusted discount rate. The use of different assumptions and inputs would yield different results. The level 3 positions are mainly sensitive to a change in the level of expected future cash flows and, accordingly, the fair value of those positions varies in proportion to changes of these cash flows. The changes in value of the level 3 instruments are accounted for in other comprehensive income. Methods and assumptions used in determining the fair value are largely dependent on whether the instrument is traded on financial markets and on the information that is available to be incorporated into the valuation models. A summary of different financial instrument types along with their fair value treatment is included below: i) Fair values for securities classified at available-for-sale or at fair value through profit or loss are determined using market prices from active markets. If no quoted prices are available from an active market, the fair value is determined using discounted cash flow models. In particular for asset-backed securities, the expected cash flows used in the discounted cash flow model take into account original underwriting criteria, borrower attributes (such as age and credit scores), loan-to-value ratios, expected house price movements and expected prepayment rates. Discount factors are based on a swap curve plus a spread reflecting the risk characteristics of the instrument. Fair values for securities classified at held-to-maturity (only necessary for disclosures) are determined in the same way. GENERAL NOTES 104 Ageas Annual Report 2021 104 | 240 For equity securities, the triggers used to determine whether there is objective evidence of impairment include, amongst others, the consideration whether the fair value is significantly (25%) below the carrying value or has been below the carrying value for a prolonged period (365 consecutive days) on the date of the statement of financial position. Depending on the type of financial asset, the recoverable amount can be estimated as follows:  The fair value using an observable market price;  The fair value using non-observable market-data; or  Based on the fair value of the collateral. If an available-for-sale asset is determined to be impaired, the allowance for impairment is recognised in the income statement. For impaired available-for-sale assets, unrealised losses previously recognised in equity are transferred to the income statement when the impairment occurs. If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale increases and the increase objectively relates to an event occurring after the recognition of any allowance for impairment in the income statement, the allowance for impairment is reversed, with the amount of the reversal recognised in the income statement. Further positive revaluations of debt instruments classified as available-for-sale appear in other comprehensive income. Impairments on an equity instrument classified as available-for-sale are not reversed through the income statement; increases in their fair value after impairment are recognised directly in other comprehensive income. Trade and settlement date All purchases and sales of financial assets requiring delivery within the timeframe established by regulation or market convention are recognised on the trade date, which is the date when Ageas becomes a party to the contractual provisions of the financial assets. Forward purchases and sales, other than those requiring delivery within the timeframe established by regulation or market convention, are recognised as derivative forward transactions until settlement. Classification and measurement of financial liabilities The IFRS classification of financial liabilities determines their measurement and recognition in the income statement as follows:  Financial liabilities at fair value through profit or loss include: i) Financial liabilities held-for-trading, including derivative instruments that do not qualify for hedge accounting; and ii) Financial liabilities that Ageas has irrevocably designated at initial recognition or at first-time adoption of IFRS as held at fair value through profit or loss, because: - The host contract includes an embedded derivative that would otherwise require separation; - It eliminates or significantly reduces a measurement or recognition inconsistency (‘accounting mismatch’); or - It relates to a group of financial assets and/or liabilities that are managed and of which the performance is evaluated on a fair value basis.  Other financial liabilities are initially recognised at fair value less transaction costs. Subsequently, other financial liabilities are measured at amortised cost using the effective interest method, with the periodic amortisation recorded in the income statement. Subordinated liabilities and borrowings are initially recognised at fair value less transaction costs and are subsequently measured at amortised cost using the effective interest method, with the periodic amortisation recorded in the income statement. Transaction costs Transaction costs on financial instruments refer to the incremental costs directly attributable to the acquisition or disposal of a financial asset or liability. They include fees and commissions paid to agents, advisers, brokers and dealers, levies imposed by regulatory agencies and securities exchanges as well as transfer taxes and duties. Those transaction costs are included in the initial measurement of the financial asset or liability, except if the financial asset or liability is measured at fair value through profit or loss, in which case transaction costs are directly expensed. Fair value of financial instruments The fair value is the amount for which an asset or granted equity instrument could be exchanged and a liability could be settled between knowledgeable, willing parties in an arm’s length transaction. The fair value presented is the ‘clean’ fair value, which is the total fair value or ‘dirty’ fair value less interest accruals and transaction costs. Accrued interest are classified separately. The fair value of a liability or own equity instrument reflects the effect of non-performance risk. Non-performance risk includes, but may not be limited to, the entity’s own risk. An asset or liability is initially measured at fair value. If the transaction price differs from this fair value, the resulting gain or loss is recognised in the income statement unless IFRS specify otherwise. 105 | 240 The basic principles used for estimating fair value are as follows:  Maximisation of the use or relevant observable (market) inputs and minimisation of the use of unobservable inputs (such as internal estimates and assumptions);  Only change in estimating techniques if an improvement can be demonstrated or if a change is necessary because of changes in market conditions or in the availability of information. In determining the fair value, following hierarchy for determining and disclosing the fair value is used, in the order listed:  Level 1: fair values measured using (unadjusted) quoted prices in an active market for identical assets or liabilities, which means that quoted prices are readily available and reflect actual and regularly occurring market transactions on an arm’s length basis;  Level 2: fair values measured using inputs other than quoted prices included in level 1 that are observable (in the market), either directly (i.e. prices) or indirectly (i.e. derived from prices, such as interest or exchange rates);  Level 3: fair values measured using inputs that are not (completely) based on observable data;  Cost. The level in the fair value hierarchy within which the fair value measurement is categorised is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Level 2 and level 3 fair value measurements usually require the use of valuation techniques. A financial instrument is regarded as quoted in an active market when quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices reflect actual and regularly occurring market transactions on an arm’s length basis. When a financial instrument is traded in an active and liquid market, its quoted market price or value provides the best evidence of its fair value. No adjustment is made to the fair value of large holdings of shares, unless there is a binding agreement to sell the shares at a price other than the market price. The appropriate quoted market price for an asset held or a liability to be issued is the current bid price, and for an asset to be acquired or a liability held, the ask price. Mid-market prices are used as a basis for establishing the fair value of assets and liabilities with offsetting market risks. If there is a significant decrease in the volume or level of activity for the asset or liability, the transactions or quoted prices are reviewed and an alternative valuation technique or multiple valuation techniques (e.g. present value techniques) may be applied. If no active market price is available, fair values are estimated using present value or other valuation techniques based on market observable inputs, existing at the reporting date. Inputs can be either directly observable (i.e. prices) or indirectly observable (i.e. derived from prices, such as interest or exchange rates). When Ageas uses quantitative unobservable inputs in measuring fair value, those are not developed in house. If there is a valuation technique commonly used by market participants to price an instrument and that valuation technique demonstrated to provide reliable estimates of prices obtained in actual market transactions, Ageas applies that valuation technique. Well established valuation techniques in financial markets include recent market transactions, discounted cash flows (including option-pricing models) and current replacement cost. An acceptable valuation technique incorporates all factors that market participants would consider when setting a price, and should be consistent with accepted economic methodologies for pricing financial instruments. These techniques are subject to inherent limitations, such as estimation of the appropriate risk- adjusted discount rate. The use of different assumptions and inputs would yield different results. The level 3 positions are mainly sensitive to a change in the level of expected future cash flows and, accordingly, the fair value of those positions varies in proportion to changes of these cash flows. The changes in value of the level 3 instruments are accounted for in other comprehensive income. Methods and assumptions used in determining the fair value are largely dependent on whether the instrument is traded on financial markets and on the information that is available to be incorporated into the valuation models. A summary of different financial instrument types along with their fair value treatment is included below: i) Fair values for securities classified at available-for-sale or at fair value through profit or loss are determined using market prices from active markets. If no quoted prices are available from an active market, the fair value is determined using discounted cash flow models. In particular for asset-backed securities, the expected cash flows used in the discounted cash flow model take into account original underwriting criteria, borrower attributes (such as age and credit scores), loan-to-value ratios, expected house price movements and expected prepayment rates. Discount factors are based on a swap curve plus a spread reflecting the risk characteristics of the instrument. Fair values for securities classified at held-to-maturity (only necessary for disclosures) are determined in the same way. 105 Ageas Annual Report 2021 106 | 240 ii) Fair values for derivative financial instruments are obtained from active markets or are determined using, as appropriate, discounted cash flow models and option pricing models. Quoted market prices provide the most reliable fair value for derivatives traded on a recognised exchange. Fair value of derivatives not traded on a recognised exchange is considered to be the value that could be realised through termination or assignment of the derivative. Factors that influence the valuation of an individual derivative include the counterparty’s credit rating and the complexity of the derivative. If these factors differ from the basic factors underlying the quote, an adjustment to the quoted price may be considered. Common valuation methodologies for an interest rate swap incorporate a comparison of the yield of the swap with the current swap yield curve. The swap yield curve is derived from quoted swap rates. Dealer bid and offer quotes are generally available for basic interest rate swaps involving counterparties whose securities are investment grade. iii) Fair values for unquoted private equity investments are estimated using applicable market multiples (e.g. price/earnings or price/cash flow ratios), refined to reflect the specific circumstances of the issuer. Level 3 valuations for private equities and venture capital make use of fair values disclosed in the audited financial statements of the relevant participations. iv) Fair values for borrowings and issued subordinated loans are determined using discounted cash flow models based upon Ageas’ current incremental lending rates for similar type of borrowing. For variable-rate loans that re-price frequently and have no significant change in credit risk, fair values are approximated by the carrying amount. Option-pricing models are used for valuing caps and prepayment options embedded in loans that have been separated in accordance with IFRS. v) Fair values for off-balance sheet commitments or guarantees are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standings. Non exchange traded financial instruments are often traded in over-the- counter (OTC) markets by dealers or other intermediaries from whom market prices can be obtained. Quotations are available from various sources for many financial instruments traded regularly in the OTC market. Those sources include the financial press, various publications and financial reporting services, and also individual market makers. The fair value methodology applied for the measurement of financial instruments, as described above, did not change as a result of the Covid-19 pandemic. If applicable, additional uncertainties related to the Covid-19 pandemic have been incorporated in the fair value measurement. More detailed information on the application of these valuation methods and assumptions is included in the applicable notes of these Ageas Consolidated Financial Statements. Offsetting of financial assets and liabilities Financial assets and liabilities are offset resulting in the net amount being reported on the statement of financial position if there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. 2.8.2 Derivatives and financial instruments used for hedging Derivatives are financial instruments such as swaps, forward and future contracts, and options (both written and purchased). The value of these financial instruments changes in response to changes in various underlying variables. Derivatives require little or no net initial investment and are settled at a future date. All derivatives are recognised on the statement of financial position at fair value on the trade date. A distinction is made between:  Derivatives held for trading; and  Derivatives for hedging purposes. Embedded derivatives Financial assets or liabilities can include embedded derivatives. Such financial instruments are often referred to as hybrid financial instruments. Hybrid financial instruments include reverse convertible bonds (bonds whose repayment may take the form of equities) or bonds with indexed interest payments. If the host contract is measured at fair value through profit or loss or if the characteristics and risks of the embedded derivative are closely related to those of the host contract, the embedded derivative is not separated, and the hybrid financial instrument is measured as one instrument. If the host contract is not measured at fair value through profit or loss and the characteristics and risks of the embedded derivative are not closely related to those of the host contract, the embedded derivative should be separated from the host contract and measured at fair value as a stand-alone derivative. Changes in the fair value are recorded in the income statement. The host contract is accounted for and measured applying the rules of the relevant category of the financial instrument. Embedded derivatives requiring separation are reported as hedging derivatives or derivatives held for trading as appropriate. Hedging On the date Ageas enters into a derivative contract and decides to designate the contract for hedging purposes, this contract is designated as either:  A fair value hedge: a hedge of the fair value of a recognised asset or liability;  A hedge of a net investment in a foreign entity; or  A cash flow hedge: a hedge of future cash flows attributable to a recognised asset or liability or a highly probable forecast transaction. 107 | 240 Hedges of firm commitments are fair value hedges, except for hedges of the foreign exchange risk of a firm commitment, which are accounted for as cash flow hedges. In the context of hedge accounting, the following documentation is prepared:  At the start of the transaction, the relationship between the hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions, are documented;  Both at the start of the hedge and on an ongoing basis, the assessment of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items is documented. Assets, liabilities, firm commitments or highly probable forecast transactions that involve a party external to Ageas are designated as hedged items. A hedged item can also be a particular risk that is a portion of the total risk of the hedged item. Changes in the fair value of a hedged item that is attributable to the hedged risk and changes in the fair value of the hedging instrument in a fair value hedge are recognised in the income statement. The change in the fair value of interest-bearing derivative instruments is presented separately from interest accruals. If the hedge no longer meets the criteria for hedge accounting, or is otherwise discontinued, the adjustment to the carrying amount of a hedged interest-bearing financial instrument that results from hedge accounting is amortised using the new effective interest rate calculated on the hedge discontinuance date. Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in equity under the caption ‘Unrealised gains and losses’. The amount in equity is reclassified to the income statement when the hedged item affects the income statement. Any hedge ineffectiveness is immediately recognised in the income statement. When the hedge of a forecast transaction or firm commitment results in the recognition of a non-financial asset or of a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and are included in the initial measurement of that non-financial asset or liability. Otherwise, amounts deferred in equity are transferred to the income statement and are classified as profit or loss in the periods during which the hedged firm commitment or forecast transaction affects the income statement. The above also applies if the hedge no longer meets the criteria for hedge accounting, or is otherwise discontinued, but the hedged forecast transaction or firm commitment are still expected to occur. If the hedged forecast transaction or firm commitment are no longer expected to occur, the amounts deferred in equity are directly transferred to the income statement. 2.8.3 Sale and repurchase agreements and lending / borrowing securities Securities subject to a commitment to repurchase them (‘repo’) are not derecognised from the statement of financial position as substantially all the risk and rewards of ownership remain within Ageas. The proceeds received from such sales are neutralised by recognising a corresponding financial liability, classified under ‘Borrowings’. Securities purchased under agreements to resell (‘reverse repos’) are not recognised on the statement of financial position. The right to receive cash from a counterparty is recorded under ‘Loans’. The difference between the sale and repurchase price is treated as interest and accrued over the life of the agreements using the effective interest method. Securities lent to counterparties remain on the statement of financial position. Similarly, securities borrowed are not recognised on the statement of financial position. If borrowed securities are sold to third parties, the proceeds from the sale and a liability for the obligation to return the collateral are recorded. The obligation to return the collateral is measured at fair value through profit or loss. Cash advanced or received related to securities borrowing or lending transactions is recorded under ‘Loans’ or under ‘Borrowings’. 2.8.4 Cash and cash equivalents Cash and cash equivalents comprise cash on hand, freely available balances with (central) banks and other financial instruments with less than three months maturity from the date of acquisition. Cash flow statement Ageas reports cash flows from operating activities using the indirect method, whereby the net result is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows. The interest received and interest paid are presented as cash flows from operating activities in the cash flow statement. Dividends received are classified as cash flows from operating activities. Dividends paid are classified as cash flows from financing activities. GENERAL NOTES 106 Ageas Annual Report 2021 106 | 240 ii) Fair values for derivative financial instruments are obtained from active markets or are determined using, as appropriate, discounted cash flow models and option pricing models. Quoted market prices provide the most reliable fair value for derivatives traded on a recognised exchange. Fair value of derivatives not traded on a recognised exchange is considered to be the value that could be realised through termination or assignment of the derivative. Factors that influence the valuation of an individual derivative include the counterparty’s credit rating and the complexity of the derivative. If these factors differ from the basic factors underlying the quote, an adjustment to the quoted price may be considered. Common valuation methodologies for an interest rate swap incorporate a comparison of the yield of the swap with the current swap yield curve. The swap yield curve is derived from quoted swap rates. Dealer bid and offer quotes are generally available for basic interest rate swaps involving counterparties whose securities are investment grade. iii) Fair values for unquoted private equity investments are estimated using applicable market multiples (e.g. price/earnings or price/cash flow ratios), refined to reflect the specific circumstances of the issuer. Level 3 valuations for private equities and venture capital make use of fair values disclosed in the audited financial statements of the relevant participations. iv) Fair values for borrowings and issued subordinated loans are determined using discounted cash flow models based upon Ageas’ current incremental lending rates for similar type of borrowing. For variable-rate loans that re-price frequently and have no significant change in credit risk, fair values are approximated by the carrying amount. Option-pricing models are used for valuing caps and prepayment options embedded in loans that have been separated in accordance with IFRS. v) Fair values for off-balance sheet commitments or guarantees are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standings. Non exchange traded financial instruments are often traded in over-the- counter (OTC) markets by dealers or other intermediaries from whom market prices can be obtained. Quotations are available from various sources for many financial instruments traded regularly in the OTC market. Those sources include the financial press, various publications and financial reporting services, and also individual market makers. The fair value methodology applied for the measurement of financial instruments, as described above, did not change as a result of the Covid-19 pandemic. If applicable, additional uncertainties related to the Covid-19 pandemic have been incorporated in the fair value measurement. More detailed information on the application of these valuation methods and assumptions is included in the applicable notes of these Ageas Consolidated Financial Statements. Offsetting of financial assets and liabilities Financial assets and liabilities are offset resulting in the net amount being reported on the statement of financial position if there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. 2.8.2 Derivatives and financial instruments used for hedging Derivatives are financial instruments such as swaps, forward and future contracts, and options (both written and purchased). The value of these financial instruments changes in response to changes in various underlying variables. Derivatives require little or no net initial investment and are settled at a future date. All derivatives are recognised on the statement of financial position at fair value on the trade date. A distinction is made between:  Derivatives held for trading; and  Derivatives for hedging purposes. Embedded derivatives Financial assets or liabilities can include embedded derivatives. Such financial instruments are often referred to as hybrid financial instruments. Hybrid financial instruments include reverse convertible bonds (bonds whose repayment may take the form of equities) or bonds with indexed interest payments. If the host contract is measured at fair value through profit or loss or if the characteristics and risks of the embedded derivative are closely related to those of the host contract, the embedded derivative is not separated, and the hybrid financial instrument is measured as one instrument. If the host contract is not measured at fair value through profit or loss and the characteristics and risks of the embedded derivative are not closely related to those of the host contract, the embedded derivative should be separated from the host contract and measured at fair value as a stand-alone derivative. Changes in the fair value are recorded in the income statement. The host contract is accounted for and measured applying the rules of the relevant category of the financial instrument. Embedded derivatives requiring separation are reported as hedging derivatives or derivatives held for trading as appropriate. Hedging On the date Ageas enters into a derivative contract and decides to designate the contract for hedging purposes, this contract is designated as either:  A fair value hedge: a hedge of the fair value of a recognised asset or liability;  A hedge of a net investment in a foreign entity; or  A cash flow hedge: a hedge of future cash flows attributable to a recognised asset or liability or a highly probable forecast transaction. 107 | 240 Hedges of firm commitments are fair value hedges, except for hedges of the foreign exchange risk of a firm commitment, which are accounted for as cash flow hedges. In the context of hedge accounting, the following documentation is prepared:  At the start of the transaction, the relationship between the hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions, are documented;  Both at the start of the hedge and on an ongoing basis, the assessment of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items is documented. Assets, liabilities, firm commitments or highly probable forecast transactions that involve a party external to Ageas are designated as hedged items. A hedged item can also be a particular risk that is a portion of the total risk of the hedged item. Changes in the fair value of a hedged item that is attributable to the hedged risk and changes in the fair value of the hedging instrument in a fair value hedge are recognised in the income statement. The change in the fair value of interest-bearing derivative instruments is presented separately from interest accruals. If the hedge no longer meets the criteria for hedge accounting, or is otherwise discontinued, the adjustment to the carrying amount of a hedged interest-bearing financial instrument that results from hedge accounting is amortised using the new effective interest rate calculated on the hedge discontinuance date. Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in equity under the caption ‘Unrealised gains and losses’. The amount in equity is reclassified to the income statement when the hedged item affects the income statement. Any hedge ineffectiveness is immediately recognised in the income statement. When the hedge of a forecast transaction or firm commitment results in the recognition of a non-financial asset or of a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and are included in the initial measurement of that non-financial asset or liability. Otherwise, amounts deferred in equity are transferred to the income statement and are classified as profit or loss in the periods during which the hedged firm commitment or forecast transaction affects the income statement. The above also applies if the hedge no longer meets the criteria for hedge accounting, or is otherwise discontinued, but the hedged forecast transaction or firm commitment are still expected to occur. If the hedged forecast transaction or firm commitment are no longer expected to occur, the amounts deferred in equity are directly transferred to the income statement. 2.8.3 Sale and repurchase agreements and lending / borrowing securities Securities subject to a commitment to repurchase them (‘repo’) are not derecognised from the statement of financial position as substantially all the risk and rewards of ownership remain within Ageas. The proceeds received from such sales are neutralised by recognising a corresponding financial liability, classified under ‘Borrowings’. Securities purchased under agreements to resell (‘reverse repos’) are not recognised on the statement of financial position. The right to receive cash from a counterparty is recorded under ‘Loans’. The difference between the sale and repurchase price is treated as interest and accrued over the life of the agreements using the effective interest method. Securities lent to counterparties remain on the statement of financial position. Similarly, securities borrowed are not recognised on the statement of financial position. If borrowed securities are sold to third parties, the proceeds from the sale and a liability for the obligation to return the collateral are recorded. The obligation to return the collateral is measured at fair value through profit or loss. Cash advanced or received related to securities borrowing or lending transactions is recorded under ‘Loans’ or under ‘Borrowings’. 2.8.4 Cash and cash equivalents Cash and cash equivalents comprise cash on hand, freely available balances with (central) banks and other financial instruments with less than three months maturity from the date of acquisition. Cash flow statement Ageas reports cash flows from operating activities using the indirect method, whereby the net result is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows. The interest received and interest paid are presented as cash flows from operating activities in the cash flow statement. Dividends received are classified as cash flows from operating activities. Dividends paid are classified as cash flows from financing activities. 107 Ageas Annual Report 2021 108 | 240 2.8.5 Investment property and property held for own use Classification and measurement of property held for own use Property classified as held for own use mainly includes:  Office buildings that Ageas occupies; and  Commercial buildings that are used to operate a business. All real estate held for own use and fixed assets are measured at cost less accumulated depreciation (except for land that is not depreciated) and any accumulated impairment losses. Cost is the amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction. The depreciation of buildings is calculated using the straight-line method to write down the cost of such assets to their residual values over their estimated useful lives. The useful life of IT, office and equipment is determined individually for each asset. The useful life of the buildings is determined for each significant part separately (component approach) and is reviewed at each year-end. The real estate is therefore split into the following components: structure, closing, techniques and equipment, heavy finishing and light finishing. The maximum useful life of components is as following: Structure 50 years for offices and retail 70 years for residential Closing 30 years for offices and retail 40 years for residential Techniques and equipment 15 years for car parks 20 years for offices 25 years for retail 40 years for residential Heavy finishing 15 years for car parks 20 years for offices 25 years for retail 40 years for residential Light finishing 10 years for offices, retail and residential  Land has an unlimited useful life and is therefore not depreciated.  As a general rule, residual values are considered to be zero.  Repairs and maintenance expenses are charged to the income statement when the expenditure is incurred. Expenditures that enhance or extend the benefits of real estate or fixed assets beyond their original use are capitalised and subsequently depreciated.  Borrowing costs to finance the construction of property, plant and equipment are treated in the same way as borrowing costs on investment property. Classification and measurement of investment property Investment properties are those properties that Ageas holds to earn rental income or for capital appreciation. Ageas may also use certain investment properties for own use. If the own use portions can be sold separately or leased out separately under a finance lease, these portions are accounted for as property, plant and equipment. If the own use portions cannot be sold separately, the property is treated as investment property only if Ageas holds an insignificant portion for own use. For reasons of comparability, Ageas applies the cost model for both investment property and for property held for own use. After initial recognition, all property is measured at its cost less any accumulated depreciation (using a straight-line method) and any accumulated impairment losses. As a result, changes in the fair value of the property are neither recognised in the income statement (except for impairment losses) nor in other comprehensive income. The residual value and the useful life of investment property is determined for each significant part separately (component approach) and is reviewed at each year-end. For investment property, the same maximal useful life of components is applied as for property held for own use. Ageas rents its investment property under various non-cancellable rental contracts. Certain contracts contain renewal options for various periods of time. The rental income associated with these contracts is recognised over time as investment income, on a straight-line basis over the rental term. 109 | 240 Transfers to, or from, investment property are only made when there is a change in use:  Into investment property at the end of owner-occupation, at the start of an operating lease to another party, or at the end of construction or development; and  Out of investment property at the commencement of owner- occupation or at the start of development with a view to sale. When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs associated with the construction contract are recognised as revenue and expenses respectively, by reference to the stage of completion of the contract activity at the date of the statement of financial position. When it is probable that the total contract costs will exceed the total contract revenue, the expected loss is recognised immediately in the income statement. Impairment of property held for own use and investment property As for other non-financial assets, property held for own use and investment property, the asset is impaired when its carrying amount exceeds the recoverable amount. The recoverable amount is measured as the higher of either ‘fair value less costs to sell’ or ‘value in use’.  The ‘fair value less costs to sell’ is the price that would be received to sell an asset in an orderly transaction between market participants (based on observable and non-observable market data), after deducting any direct incremental disposal costs.  The ‘value in use’ is the present value of estimated future cash flows expected to arise from continuing use of the asset and from its disposal at the end of its useful life, without deduction of transfer tax. At the end of each reporting period, Ageas assesses whether there is any objective indication that an asset may be impaired, considering various external (e.g. significant changes in the economic environment) and internal (e.g. plan to dispose) sources of information. If any such indication exists (and only then), Ageas will reduce the carrying amount of the impaired asset to its estimated recoverable amount, and the amount of the change in the current year is recognised in the income statement. After the recognition of an impairment, the depreciation for future periods is adjusted based on the revised carrying amount less its residual value over the assets remaining useful life. For property, the useful life of each significant part is determined separately and reviewed at year-end. If in a subsequent period, the amount of the impairment on non-financial assets other than goodwill decreases, due to an event occurring after the write-down, the previously recorded impairment loss is reversed in the income statement. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Borrowing costs Borrowing costs are generally expensed as incurred. Borrowing costs that are directly attributable to the acquisition or construction of an asset are capitalised while the asset is being constructed, as part of the cost of that asset. Capitalisation of borrowing costs should commence when:  Expenditures for the asset and borrowing costs are being incurred; and  Activities necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs ceases when the asset is substantially ready for its intended use or sale. If active development is interrupted for an extended period, capitalisation is suspended. Where construction occurs piecemeal, and use of each part is possible as construction continues, capitalisation for each part ceases upon substantial completion of that part. For a borrowing associated with a specific asset, the actual rate on that borrowing is applied. Otherwise, a weighted average cost of borrowings is applied. For qualifying assets commencing on or before 1 January 2008, borrowing costs that were directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an asset that necessarily took a substantial period of time to get ready for its intended use or sale) were expensed as incurred. 2.8.6 Goodwill and other intangible assets Intangible assets An intangible asset is an identifiable non-monetary asset and is recognised if, and only if, it will generate future economic benefits and if the cost of the asset can be measured reliably. Intangible assets are recorded on the statement of financial position at cost less any accumulated amortisation and any accumulated impairment losses. The residual value and the useful life of intangible assets are reviewed at each year-end. Intangible assets with definite lives are amortised over their estimated useful life using the straight-line method. Intangible assets with indefinite lives, such as goodwill, are not amortised, but are instead tested for impairment at least annually. Any impairment loss identified is recognised in the income statement. GENERAL NOTES 108 Ageas Annual Report 2021 108 | 240 2.8.5 Investment property and property held for own use Classification and measurement of property held for own use Property classified as held for own use mainly includes:  Office buildings that Ageas occupies; and  Commercial buildings that are used to operate a business. All real estate held for own use and fixed assets are measured at cost less accumulated depreciation (except for land that is not depreciated) and any accumulated impairment losses. Cost is the amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction. The depreciation of buildings is calculated using the straight-line method to write down the cost of such assets to their residual values over their estimated useful lives. The useful life of IT, office and equipment is determined individually for each asset. The useful life of the buildings is determined for each significant part separately (component approach) and is reviewed at each year-end. The real estate is therefore split into the following components: structure, closing, techniques and equipment, heavy finishing and light finishing. The maximum useful life of components is as following: Structure 50 years for offices and retail 70 years for residential Closing 30 years for offices and retail 40 years for residential Techniques and equipment 15 years for car parks 20 years for offices 25 years for retail 40 years for residential Heavy finishing 15 years for car parks 20 years for offices 25 years for retail 40 years for residential Light finishing 10 years for offices, retail and residential  Land has an unlimited useful life and is therefore not depreciated.  As a general rule, residual values are considered to be zero.  Repairs and maintenance expenses are charged to the income statement when the expenditure is incurred. Expenditures that enhance or extend the benefits of real estate or fixed assets beyond their original use are capitalised and subsequently depreciated.  Borrowing costs to finance the construction of property, plant and equipment are treated in the same way as borrowing costs on investment property. Classification and measurement of investment property Investment properties are those properties that Ageas holds to earn rental income or for capital appreciation. Ageas may also use certain investment properties for own use. If the own use portions can be sold separately or leased out separately under a finance lease, these portions are accounted for as property, plant and equipment. If the own use portions cannot be sold separately, the property is treated as investment property only if Ageas holds an insignificant portion for own use. For reasons of comparability, Ageas applies the cost model for both investment property and for property held for own use. After initial recognition, all property is measured at its cost less any accumulated depreciation (using a straight-line method) and any accumulated impairment losses. As a result, changes in the fair value of the property are neither recognised in the income statement (except for impairment losses) nor in other comprehensive income. The residual value and the useful life of investment property is determined for each significant part separately (component approach) and is reviewed at each year-end. For investment property, the same maximal useful life of components is applied as for property held for own use. Ageas rents its investment property under various non-cancellable rental contracts. Certain contracts contain renewal options for various periods of time. The rental income associated with these contracts is recognised over time as investment income, on a straight-line basis over the rental term. 109 | 240 Transfers to, or from, investment property are only made when there is a change in use:  Into investment property at the end of owner-occupation, at the start of an operating lease to another party, or at the end of construction or development; and  Out of investment property at the commencement of owner- occupation or at the start of development with a view to sale. When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs associated with the construction contract are recognised as revenue and expenses respectively, by reference to the stage of completion of the contract activity at the date of the statement of financial position. When it is probable that the total contract costs will exceed the total contract revenue, the expected loss is recognised immediately in the income statement. Impairment of property held for own use and investment property As for other non-financial assets, property held for own use and investment property, the asset is impaired when its carrying amount exceeds the recoverable amount. The recoverable amount is measured as the higher of either ‘fair value less costs to sell’ or ‘value in use’.  The ‘fair value less costs to sell’ is the price that would be received to sell an asset in an orderly transaction between market participants (based on observable and non-observable market data), after deducting any direct incremental disposal costs.  The ‘value in use’ is the present value of estimated future cash flows expected to arise from continuing use of the asset and from its disposal at the end of its useful life, without deduction of transfer tax. At the end of each reporting period, Ageas assesses whether there is any objective indication that an asset may be impaired, considering various external (e.g. significant changes in the economic environment) and internal (e.g. plan to dispose) sources of information. If any such indication exists (and only then), Ageas will reduce the carrying amount of the impaired asset to its estimated recoverable amount, and the amount of the change in the current year is recognised in the income statement. After the recognition of an impairment, the depreciation for future periods is adjusted based on the revised carrying amount less its residual value over the assets remaining useful life. For property, the useful life of each significant part is determined separately and reviewed at year-end. If in a subsequent period, the amount of the impairment on non-financial assets other than goodwill decreases, due to an event occurring after the write-down, the previously recorded impairment loss is reversed in the income statement. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Borrowing costs Borrowing costs are generally expensed as incurred. Borrowing costs that are directly attributable to the acquisition or construction of an asset are capitalised while the asset is being constructed, as part of the cost of that asset. Capitalisation of borrowing costs should commence when:  Expenditures for the asset and borrowing costs are being incurred; and  Activities necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs ceases when the asset is substantially ready for its intended use or sale. If active development is interrupted for an extended period, capitalisation is suspended. Where construction occurs piecemeal, and use of each part is possible as construction continues, capitalisation for each part ceases upon substantial completion of that part. For a borrowing associated with a specific asset, the actual rate on that borrowing is applied. Otherwise, a weighted average cost of borrowings is applied. For qualifying assets commencing on or before 1 January 2008, borrowing costs that were directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an asset that necessarily took a substantial period of time to get ready for its intended use or sale) were expensed as incurred. 2.8.6 Goodwill and other intangible assets Intangible assets An intangible asset is an identifiable non-monetary asset and is recognised if, and only if, it will generate future economic benefits and if the cost of the asset can be measured reliably. Intangible assets are recorded on the statement of financial position at cost less any accumulated amortisation and any accumulated impairment losses. The residual value and the useful life of intangible assets are reviewed at each year-end. Intangible assets with definite lives are amortised over their estimated useful life using the straight-line method. Intangible assets with indefinite lives, such as goodwill, are not amortised, but are instead tested for impairment at least annually. Any impairment loss identified is recognised in the income statement. 109 Ageas Annual Report 2021 110 | 240 Value of business acquired (VOBA) Value of business acquired represents the difference between the fair value at acquisition date measured using the Ageas’ accounting policies and the subsequent carrying value of a portfolio of insurance and investment contracts acquired in a business or portfolio acquisition. VOBA is recognised as an intangible asset and is amortised over the income recognition period of the portfolio of contracts acquired. Each reporting date, VOBA is part of the liability adequacy test to assess whether the liabilities arising from insurance and investment contracts are adequate. Internally generated intangible assets Internally generated intangible assets are capitalised when Ageas can demonstrate all of the following:  The technical feasibility of completing the intangible asset so that it will be available for use or sale;  Its intention to complete the intangible asset and use or sell it;  Its ability to use or sell the intangible asset;  How the intangible asset will generate probable future economic benefits;  The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and  Its ability to measure reliably the expenditure attributable to the intangible asset during its development. Only intangible assets arising from development are capitalised. All other internally generated intangible assets are not capitalised and expenditure is reflected in the income statement in the year in which the expenditure is incurred. Software Software for computer hardware that cannot operate without that specific software, such as the operating system, is an integral part of the related hardware and is treated as property, plant and equipment. If the software is not an integral part of the related hardware, the costs incurred during the development phase, for which Ageas can demonstrate all of the above-mentioned criteria, are capitalised as an intangible asset and are amortised over their estimated useful life using the straight-line method. In general, such software is amortised over a maximum of 5 years. Other intangible assets with finite lives Other intangible assets with finite lives, such as parking concessions, trademarks and licenses, are generally amortised over their estimated useful lives using the straight-line method. Intangible assets with finite lives are reviewed for indicators of impairment at each reporting date. Car park concessions are recognised as intangible assets when Ageas has the right to charge for the usage of the concession infrastructure. The intangible asset received is measured at fair value at initial recognition, as consideration for providing construction or upgrade services in a service concession arrangement. The applicable fair value is determined by reference to the fair value of the construction or upgrade services provided. Subsequent to initial recognition, the car park concessions are measured at cost less any accumulated amortisation and any accumulated impairment losses. The estimated useful life of an intangible asset in a service concession arrangement is the period that starts at the time Ageas is able to charge for the use of the concession infrastructure until the end of the concession period. The impairment principles applied to car park concessions are the same as those applicable to investment properties. Goodwill Goodwill from business combinations from 1 January 2010 At initial recognition, goodwill is measured at cost, being the excess of the fair value of the consideration transferred over:  Ageas’ share in the net identifiable assets acquired and liabilities assumed; and  Net of the fair value of any previously held equity interest in the acquiree. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill from business combinations prior to 1 January 2010 In comparison with the above-mentioned requirements, the following differences apply: Business combinations were accounted for using the purchase method. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net assets. Business combinations achieved in stages were accounted for as separate steps. Any additional acquired share of interest did not affect previously recognised goodwill. A contingent consideration was recognised if, and only if, Ageas had a present obligation, economic outflow was more likely than not and a reliable estimate was determinable. Subsequent adjustments to the contingent consideration affected goodwill. Impairment of goodwill Goodwill is an intangible asset with an indefinite life and, like all other intangible assets with indefinite lives, the carrying value of those intangible assets with indefinite life is assessed annually, or more frequently, if events or changes in circumstances indicate that such carrying value may not be recoverable. If such indication exists, the recoverable amount is determined for the cash-generating unit to which goodwill belongs. This amount is then compared to the carrying amount of the cash-generating unit and an impairment loss is recognised if the recoverable amount is less than the carrying amount. Impairment losses are recognised immediately in the income statement. 111 | 240 In the event of an impairment loss, Ageas first reduces the carrying amount of goodwill allocated to the cash-generating unit and then reduces the other assets in the cash-generating unit pro-rata on the basis of the carrying amount of each asset in the cash generating unit. Previously recognised impairment losses relating to goodwill are not reversed. 2.8.7 Leased assets Ageas as a lessor Assets leased under an operating lease are recorded on the statement of financial position under ‘investment property’ (buildings) and ‘property, plant and equipment’ (equipment and motor vehicles). Those assets are recorded at cost less accumulated depreciation. Rental income, net of any incentives given to lessees, is recognised on a straight-line basis over the lease term. Initial direct costs incurred by Ageas are added to the carrying amount of the leased asset and are recognised as an expense over the lease term on the same basis as the rental income. Ageas also entered into finance lease transactions, in which substantially all the risks and rewards related to ownership of the leased assets, other than the legal title, are transferred to the lessee. Assets leased under a finance lease are presented as a receivable at an amount equal to the net investment in the lease. The net investment in the lease comprises the present value of the lease payments and any residual value guarantee. The difference between the asset and the present value of the receivable is recognised as unearned finance income. Finance income is recognised over the term of the lease based on a pattern reflecting a constant periodic rate of return on the outstanding net investment in the finance lease. Initial direct costs incurred by Ageas are included in the initial measurement of the net investment in the lease and reduce the amount of income recognised over the lease term. Ageas as a lessee Ageas leases land, buildings, equipment and motor vehicles. The lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. A single measurement model applies to assets leased under both operating and finance lease transactions, resulting in the recognition of a right-of-use asset and a lease liability. The lease liability comprises the present value of following lease payments that are not paid at the commencement date, including lease payments to be made under reasonably certain extension options:  Fixed payments (including in-substance fixed payments) less any lease incentives receivable;  Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;  Amounts expected to be payable by Ageas under residual value guarantees;  The exercise price of a purchase option if Ageas is reasonably certain to exercise that option; and  Payments of penalties for terminating the lease, if the lease term reflects Ageas exercising that option. The lease liability is discounted applying the interest rate implicit in the lease. If that rate cannot be readily determined, Ageas’ incremental borrowing rate is applied. As incremental borrowing rate, Ageas applies a global available composite curve, which is based on a sample of existing secondary bonds from financial issuers in the A range, increased by a risk premium. For car parks, a risk-free rate equal to the interest rate swap for a similar duration, increased by a risk premium, is applied. The carrying amount of the lease liability subsequently increases to reflect interest on the lease liability and reduces to reflect the lease payments made. The lease liability is remeasured in order to reflect lease modifications or changes in the lease payments, including a change in an index or a rate used to determine those payments. The interest on the lease liability in each period represents the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability. The interest on the lease liability is recognised in the income statement, together with the variable lease payments not included in the measurement of the lease liability in the period in which the event or condition that triggers those payments occurs. The right-of-use asset is initially measured at cost and comprises the initial lease liability recognised, adjusted for any lease payments made at or before the commencement of the lease, any lease incentives received, any initial direct costs incurred by Ageas and an estimate of the costs to be incurred in dismantling and removing the underlying asset. Subsequently, the right-of-use asset is measured at cost, less accumulated depreciation and any impairment losses. The right-of-use asset is depreciated on a straight-line basis over the shorter of the asset’s useful life and the lease term. Similar to other non-financial assets, a right-of-use asset is impaired when its carrying amount exceeds its recoverable amount. The depreciation of the right-of-use asset and recognition of any impairment loss is recognised in the income statement. In case of remeasurement of the lease liability, to reflect lease modifications or changes in the lease payments, the right-of-use asset is adjusted for this remeasurement. The measurement model above is not applied to leases of asset that are of low value to Ageas or to short-term leases, of which the lease term at commencement of the lease is 12 months or less. For those leases, the lease payments made are recognised as an expense in the income statement on a straight-line basis over the lease term. GENERAL NOTES 110 Ageas Annual Report 2021 110 | 240 Value of business acquired (VOBA) Value of business acquired represents the difference between the fair value at acquisition date measured using the Ageas’ accounting policies and the subsequent carrying value of a portfolio of insurance and investment contracts acquired in a business or portfolio acquisition. VOBA is recognised as an intangible asset and is amortised over the income recognition period of the portfolio of contracts acquired. Each reporting date, VOBA is part of the liability adequacy test to assess whether the liabilities arising from insurance and investment contracts are adequate. Internally generated intangible assets Internally generated intangible assets are capitalised when Ageas can demonstrate all of the following:  The technical feasibility of completing the intangible asset so that it will be available for use or sale;  Its intention to complete the intangible asset and use or sell it;  Its ability to use or sell the intangible asset;  How the intangible asset will generate probable future economic benefits;  The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and  Its ability to measure reliably the expenditure attributable to the intangible asset during its development. Only intangible assets arising from development are capitalised. All other internally generated intangible assets are not capitalised and expenditure is reflected in the income statement in the year in which the expenditure is incurred. Software Software for computer hardware that cannot operate without that specific software, such as the operating system, is an integral part of the related hardware and is treated as property, plant and equipment. If the software is not an integral part of the related hardware, the costs incurred during the development phase, for which Ageas can demonstrate all of the above-mentioned criteria, are capitalised as an intangible asset and are amortised over their estimated useful life using the straight-line method. In general, such software is amortised over a maximum of 5 years. Other intangible assets with finite lives Other intangible assets with finite lives, such as parking concessions, trademarks and licenses, are generally amortised over their estimated useful lives using the straight-line method. Intangible assets with finite lives are reviewed for indicators of impairment at each reporting date. Car park concessions are recognised as intangible assets when Ageas has the right to charge for the usage of the concession infrastructure. The intangible asset received is measured at fair value at initial recognition, as consideration for providing construction or upgrade services in a service concession arrangement. The applicable fair value is determined by reference to the fair value of the construction or upgrade services provided. Subsequent to initial recognition, the car park concessions are measured at cost less any accumulated amortisation and any accumulated impairment losses. The estimated useful life of an intangible asset in a service concession arrangement is the period that starts at the time Ageas is able to charge for the use of the concession infrastructure until the end of the concession period. The impairment principles applied to car park concessions are the same as those applicable to investment properties. Goodwill Goodwill from business combinations from 1 January 2010 At initial recognition, goodwill is measured at cost, being the excess of the fair value of the consideration transferred over:  Ageas’ share in the net identifiable assets acquired and liabilities assumed; and  Net of the fair value of any previously held equity interest in the acquiree. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill from business combinations prior to 1 January 2010 In comparison with the above-mentioned requirements, the following differences apply: Business combinations were accounted for using the purchase method. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net assets. Business combinations achieved in stages were accounted for as separate steps. Any additional acquired share of interest did not affect previously recognised goodwill. A contingent consideration was recognised if, and only if, Ageas had a present obligation, economic outflow was more likely than not and a reliable estimate was determinable. Subsequent adjustments to the contingent consideration affected goodwill. Impairment of goodwill Goodwill is an intangible asset with an indefinite life and, like all other intangible assets with indefinite lives, the carrying value of those intangible assets with indefinite life is assessed annually, or more frequently, if events or changes in circumstances indicate that such carrying value may not be recoverable. If such indication exists, the recoverable amount is determined for the cash-generating unit to which goodwill belongs. This amount is then compared to the carrying amount of the cash-generating unit and an impairment loss is recognised if the recoverable amount is less than the carrying amount. Impairment losses are recognised immediately in the income statement. 111 | 240 In the event of an impairment loss, Ageas first reduces the carrying amount of goodwill allocated to the cash-generating unit and then reduces the other assets in the cash-generating unit pro-rata on the basis of the carrying amount of each asset in the cash generating unit. Previously recognised impairment losses relating to goodwill are not reversed. 2.8.7 Leased assets Ageas as a lessor Assets leased under an operating lease are recorded on the statement of financial position under ‘investment property’ (buildings) and ‘property, plant and equipment’ (equipment and motor vehicles). Those assets are recorded at cost less accumulated depreciation. Rental income, net of any incentives given to lessees, is recognised on a straight-line basis over the lease term. Initial direct costs incurred by Ageas are added to the carrying amount of the leased asset and are recognised as an expense over the lease term on the same basis as the rental income. Ageas also entered into finance lease transactions, in which substantially all the risks and rewards related to ownership of the leased assets, other than the legal title, are transferred to the lessee. Assets leased under a finance lease are presented as a receivable at an amount equal to the net investment in the lease. The net investment in the lease comprises the present value of the lease payments and any residual value guarantee. The difference between the asset and the present value of the receivable is recognised as unearned finance income. Finance income is recognised over the term of the lease based on a pattern reflecting a constant periodic rate of return on the outstanding net investment in the finance lease. Initial direct costs incurred by Ageas are included in the initial measurement of the net investment in the lease and reduce the amount of income recognised over the lease term. Ageas as a lessee Ageas leases land, buildings, equipment and motor vehicles. The lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. A single measurement model applies to assets leased under both operating and finance lease transactions, resulting in the recognition of a right-of-use asset and a lease liability. The lease liability comprises the present value of following lease payments that are not paid at the commencement date, including lease payments to be made under reasonably certain extension options:  Fixed payments (including in-substance fixed payments) less any lease incentives receivable;  Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;  Amounts expected to be payable by Ageas under residual value guarantees;  The exercise price of a purchase option if Ageas is reasonably certain to exercise that option; and  Payments of penalties for terminating the lease, if the lease term reflects Ageas exercising that option. The lease liability is discounted applying the interest rate implicit in the lease. If that rate cannot be readily determined, Ageas’ incremental borrowing rate is applied. As incremental borrowing rate, Ageas applies a global available composite curve, which is based on a sample of existing secondary bonds from financial issuers in the A range, increased by a risk premium. For car parks, a risk-free rate equal to the interest rate swap for a similar duration, increased by a risk premium, is applied. The carrying amount of the lease liability subsequently increases to reflect interest on the lease liability and reduces to reflect the lease payments made. The lease liability is remeasured in order to reflect lease modifications or changes in the lease payments, including a change in an index or a rate used to determine those payments. The interest on the lease liability in each period represents the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability. The interest on the lease liability is recognised in the income statement, together with the variable lease payments not included in the measurement of the lease liability in the period in which the event or condition that triggers those payments occurs. The right-of-use asset is initially measured at cost and comprises the initial lease liability recognised, adjusted for any lease payments made at or before the commencement of the lease, any lease incentives received, any initial direct costs incurred by Ageas and an estimate of the costs to be incurred in dismantling and removing the underlying asset. Subsequently, the right-of-use asset is measured at cost, less accumulated depreciation and any impairment losses. The right-of-use asset is depreciated on a straight-line basis over the shorter of the asset’s useful life and the lease term. Similar to other non-financial assets, a right-of-use asset is impaired when its carrying amount exceeds its recoverable amount. The depreciation of the right-of-use asset and recognition of any impairment loss is recognised in the income statement. In case of remeasurement of the lease liability, to reflect lease modifications or changes in the lease payments, the right-of-use asset is adjusted for this remeasurement. The measurement model above is not applied to leases of asset that are of low value to Ageas or to short-term leases, of which the lease term at commencement of the lease is 12 months or less. For those leases, the lease payments made are recognised as an expense in the income statement on a straight-line basis over the lease term. 111 Ageas Annual Report 2021 112 | 240 Cash flow statement Lease payments are presented as cash flows from operating activities in the consolidated cash flow statement, as part of ‘borrowings’. 2.8.8 Loans Loans to banks, loans to governments and loans to customers include loans originated by Ageas by providing money directly to the borrower or to a sub-participation agent. Those loans are measured at amortised cost. Debt securities acquired on the primary market directly from the issuer are recorded as loans, provided there is no active market for those securities. Loans that are originated or purchased with the intent to be sold or securitised in the short-term are classified as assets held for trading. Loans that are designated as held at fair value through profit or loss or available-for-sale are classified as such on initial recognition. Loan commitments that allow for a drawdown of a loan within the timeframe generally established by regulation or convention in the marketplace are not recognised in the statement of financial position. Incremental costs incurred and loan origination fees earned in securing a loan are deferred and amortised over the life of the loan, as an adjustment to the yield. Impairments on loans A credit risk for a specific loan impairment is established if there is an objective evidence that Ageas will not be able to collect all amounts due in accordance with the contractual terms. The amount of the impairment is the difference between the carrying amount and the recoverable amount, being the present value of expected cash flows or, alternatively, the collateral value less costs to sell if the loan is secured. An ‘incurred but not reported’ (IBNR) impairment on loans is recorded when there is an objective evidence that incurred losses are present in components of the loan portfolio, without having specifically identified impaired loans. This impairment is estimated based upon historical patterns of losses in each component, reflecting the current economic climate in which the borrowers operate and taking into account the risk of difficulties in servicing external debt in some foreign countries based on an assessment of the political and economic situation. Impairments are recorded as a decrease in the carrying value of ‘loans to banks’ and ‘loans to customers’. Impairments on loan commitments recorded off the statement of financial position are classified under ‘provisions’. When a specific loan is identified as uncollectible and all legal and procedural actions have been exhausted, the loan is written-off against the related charge for impairment; subsequent recoveries are credited to change in impairment in the income statement. 2.8.9 Reinsurance and other receivables Reinsurance Ageas assumes and/or cedes reinsurance in the normal course of business. Reinsurance receivables principally include balances due from both insurance and reinsurance companies for ceded insurance liabilities. Amounts recoverable from or due to reinsurers are estimated in a manner consistent with the amounts associated with the reinsured policies and in accordance with the reinsurance contract. Reinsurance is presented on the statement of financial position on a gross basis, unless a right to offset exists. Other receivables Other receivables arising from the normal course of business and originated by Ageas are initially recorded at fair value and subsequently measured at amortised cost using the effective interest method, less impairments. 2.8.10 Deferred acquisition costs (DAC) General The costs of new and renewed insurance business, all of which vary with and primarily are related to the production of new business, are deferred and amortised, resulting in deferred acquisition costs (DAC). DAC principally includes commissions, underwriting, agency and policy issue expenses. The method for amortisation is based on expected earned premium or estimated gross profit margins. DAC are periodically reviewed to ensure their recoverability based on estimates of future profits of the underlying contracts. Amortisation in proportion to anticipated premiums For life insurance and investment products, both without Discretionary Participation Features, DAC is amortised in proportion to the anticipated premiums. Assumptions as to anticipated premiums are estimated at the date of policy issuance and are consistently applied during the life of the contracts. Deviations from estimated experience are reflected in the income statement in the period such deviations occur. For these contracts, DAC is generally amortised for the total life of the policy. 113 | 240 Amortisation in line with Estimated Gross Profit (EGP) margin For life insurance and investment products, both with Discretionary Participation Features, DAC is amortised over the expected life of the contracts based on the present value of the estimated gross profit margin or profit amounts using the expected investment yield. Estimated gross profit margin includes anticipated premiums and investment result less benefits and administrative expenses, changes in the net level premium reserve and expected policyholder dividend, as appropriate. Deviations of actual results from estimated experience are reflected in the income statement in the period in which such deviations occur. DAC is adjusted for the amortisation effect of unrealised gains (losses) recorded in equity as if they were realised with the related adjustment to unrealised gains (losses) in equity. Amortisation in line with earned premiums For short duration contracts, DAC is amortised over the period in which the related premiums written are earned. Future investment income is considered (at a risk-free rate of return) in assessing the recoverability of DAC. Amortisation in line with related revenues of service provided Some investment contracts without Discretionary Participation Features issued by insurance entities involve both the origination of a financial instrument and the provision of investment management services. Where clearly identifiable, the incremental costs relating to the right to provide investment management services are recognised as an asset and are amortised as the related revenues are recognised. The related intangible asset is tested for recoverability at each reporting date. Fee charges for managing investments on these contracts are recognised as revenue as the services are provided. 2.8.11 Liabilities arising from (re)insurance and investment contracts The liabilities arising from (re)insurance and investment contracts relate to:  Insurance contracts;  Reinsurance contracts;  Investment contracts with Discretionary Participation Features (DPF); and  Investment contracts without DPF. Classification of contracts Policyholder liabilities are classified based on the underlying insurance contract features and the specified risks of these contracts: Insurance contracts are those contracts in which Ageas has accepted significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. Insurance risk is significant if, and only if, an insured event could cause an insurer to pay significant additional benefits in any scenario, excluding scenarios that lack commercial substance (i.e. have no discernible effect on the economics of the transaction). Insurance contracts can also transfer financial risk. Investment contracts (with or without DPF) are those contracts that transfer significant financial risk. Financial risk is the risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of price or rates, credit rating or credit index or other variable, providing in the case of a non-financial variable that the variable is not specific to a party of the contract. Once a contract has been classified as an insurance contract, it remains an insurance contract for the remainder of its lifetime, even if the insurance risk reduced significantly during this period, unless all rights and obligations are extinguished or expired. Investment contracts can, however, be reclassified as insurance contracts after inception if insurance risk becomes significant. Insurance contracts, reinsurance contracts and investment contracts with DPF are accounted for in accordance to IFRS 4. Investment contracts that do not transfer significant insurance risk are accounted for in accordance to IAS 39. Life insurance Future policy benefits For Life insurance contracts, future policy benefit liabilities are calculated using a net level premium method (i.e. present value of future net cash flows) based on actuarial assumptions as determined by historical experience and industry standards. Participating policies include any additional liabilities reflecting any contractual dividends or other participation features. For some designated contracts, the future policy benefit liabilities have been remeasured to reflect current market interest rates. The non-participating insurance and investment contracts are primarily unit-linked contracts where Ageas holds the investments on behalf of the policyholder and measures those investments at fair value. Treasury shares on behalf of policyholders are eliminated. Unit-linked contracts are a specific type of Life insurance contracts governed by Article 25 of EU Directive 2002/83/EC. The benefits of those contracts are linked to UCITS (‘Undertakings for Collective Investment in Transferable Securities’), a share basket or a reference value, or to a combination of these values or units, as laid down in the contracts. The liabilities of unit- linked contracts are measured at unit value (i.e. fair value of the fund in which the unit-linked contracts are invested divided by the number of units of the fund), with changes in fair value recognised in the income statement. Fair value is never less than the amount payable on surrender (if applicable), discounted for the required notice period where applicable. GENERAL NOTES 112 Ageas Annual Report 2021 112 | 240 Cash flow statement Lease payments are presented as cash flows from operating activities in the consolidated cash flow statement, as part of ‘borrowings’. 2.8.8 Loans Loans to banks, loans to governments and loans to customers include loans originated by Ageas by providing money directly to the borrower or to a sub-participation agent. Those loans are measured at amortised cost. Debt securities acquired on the primary market directly from the issuer are recorded as loans, provided there is no active market for those securities. Loans that are originated or purchased with the intent to be sold or securitised in the short-term are classified as assets held for trading. Loans that are designated as held at fair value through profit or loss or available-for-sale are classified as such on initial recognition. Loan commitments that allow for a drawdown of a loan within the timeframe generally established by regulation or convention in the marketplace are not recognised in the statement of financial position. Incremental costs incurred and loan origination fees earned in securing a loan are deferred and amortised over the life of the loan, as an adjustment to the yield. Impairments on loans A credit risk for a specific loan impairment is established if there is an objective evidence that Ageas will not be able to collect all amounts due in accordance with the contractual terms. The amount of the impairment is the difference between the carrying amount and the recoverable amount, being the present value of expected cash flows or, alternatively, the collateral value less costs to sell if the loan is secured. An ‘incurred but not reported’ (IBNR) impairment on loans is recorded when there is an objective evidence that incurred losses are present in components of the loan portfolio, without having specifically identified impaired loans. This impairment is estimated based upon historical patterns of losses in each component, reflecting the current economic climate in which the borrowers operate and taking into account the risk of difficulties in servicing external debt in some foreign countries based on an assessment of the political and economic situation. Impairments are recorded as a decrease in the carrying value of ‘loans to banks’ and ‘loans to customers’. Impairments on loan commitments recorded off the statement of financial position are classified under ‘provisions’. When a specific loan is identified as uncollectible and all legal and procedural actions have been exhausted, the loan is written-off against the related charge for impairment; subsequent recoveries are credited to change in impairment in the income statement. 2.8.9 Reinsurance and other receivables Reinsurance Ageas assumes and/or cedes reinsurance in the normal course of business. Reinsurance receivables principally include balances due from both insurance and reinsurance companies for ceded insurance liabilities. Amounts recoverable from or due to reinsurers are estimated in a manner consistent with the amounts associated with the reinsured policies and in accordance with the reinsurance contract. Reinsurance is presented on the statement of financial position on a gross basis, unless a right to offset exists. Other receivables Other receivables arising from the normal course of business and originated by Ageas are initially recorded at fair value and subsequently measured at amortised cost using the effective interest method, less impairments. 2.8.10 Deferred acquisition costs (DAC) General The costs of new and renewed insurance business, all of which vary with and primarily are related to the production of new business, are deferred and amortised, resulting in deferred acquisition costs (DAC). DAC principally includes commissions, underwriting, agency and policy issue expenses. The method for amortisation is based on expected earned premium or estimated gross profit margins. DAC are periodically reviewed to ensure their recoverability based on estimates of future profits of the underlying contracts. Amortisation in proportion to anticipated premiums For life insurance and investment products, both without Discretionary Participation Features, DAC is amortised in proportion to the anticipated premiums. Assumptions as to anticipated premiums are estimated at the date of policy issuance and are consistently applied during the life of the contracts. Deviations from estimated experience are reflected in the income statement in the period such deviations occur. For these contracts, DAC is generally amortised for the total life of the policy. 113 | 240 Amortisation in line with Estimated Gross Profit (EGP) margin For life insurance and investment products, both with Discretionary Participation Features, DAC is amortised over the expected life of the contracts based on the present value of the estimated gross profit margin or profit amounts using the expected investment yield. Estimated gross profit margin includes anticipated premiums and investment result less benefits and administrative expenses, changes in the net level premium reserve and expected policyholder dividend, as appropriate. Deviations of actual results from estimated experience are reflected in the income statement in the period in which such deviations occur. DAC is adjusted for the amortisation effect of unrealised gains (losses) recorded in equity as if they were realised with the related adjustment to unrealised gains (losses) in equity. Amortisation in line with earned premiums For short duration contracts, DAC is amortised over the period in which the related premiums written are earned. Future investment income is considered (at a risk-free rate of return) in assessing the recoverability of DAC. Amortisation in line with related revenues of service provided Some investment contracts without Discretionary Participation Features issued by insurance entities involve both the origination of a financial instrument and the provision of investment management services. Where clearly identifiable, the incremental costs relating to the right to provide investment management services are recognised as an asset and are amortised as the related revenues are recognised. The related intangible asset is tested for recoverability at each reporting date. Fee charges for managing investments on these contracts are recognised as revenue as the services are provided. 2.8.11 Liabilities arising from (re)insurance and investment contracts The liabilities arising from (re)insurance and investment contracts relate to:  Insurance contracts;  Reinsurance contracts;  Investment contracts with Discretionary Participation Features (DPF); and  Investment contracts without DPF. Classification of contracts Policyholder liabilities are classified based on the underlying insurance contract features and the specified risks of these contracts: Insurance contracts are those contracts in which Ageas has accepted significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. Insurance risk is significant if, and only if, an insured event could cause an insurer to pay significant additional benefits in any scenario, excluding scenarios that lack commercial substance (i.e. have no discernible effect on the economics of the transaction). Insurance contracts can also transfer financial risk. Investment contracts (with or without DPF) are those contracts that transfer significant financial risk. Financial risk is the risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of price or rates, credit rating or credit index or other variable, providing in the case of a non-financial variable that the variable is not specific to a party of the contract. Once a contract has been classified as an insurance contract, it remains an insurance contract for the remainder of its lifetime, even if the insurance risk reduced significantly during this period, unless all rights and obligations are extinguished or expired. Investment contracts can, however, be reclassified as insurance contracts after inception if insurance risk becomes significant. Insurance contracts, reinsurance contracts and investment contracts with DPF are accounted for in accordance to IFRS 4. Investment contracts that do not transfer significant insurance risk are accounted for in accordance to IAS 39. Life insurance Future policy benefits For Life insurance contracts, future policy benefit liabilities are calculated using a net level premium method (i.e. present value of future net cash flows) based on actuarial assumptions as determined by historical experience and industry standards. Participating policies include any additional liabilities reflecting any contractual dividends or other participation features. For some designated contracts, the future policy benefit liabilities have been remeasured to reflect current market interest rates. The non-participating insurance and investment contracts are primarily unit-linked contracts where Ageas holds the investments on behalf of the policyholder and measures those investments at fair value. Treasury shares on behalf of policyholders are eliminated. Unit-linked contracts are a specific type of Life insurance contracts governed by Article 25 of EU Directive 2002/83/EC. The benefits of those contracts are linked to UCITS (‘Undertakings for Collective Investment in Transferable Securities’), a share basket or a reference value, or to a combination of these values or units, as laid down in the contracts. The liabilities of unit- linked contracts are measured at unit value (i.e. fair value of the fund in which the unit-linked contracts are invested divided by the number of units of the fund), with changes in fair value recognised in the income statement. Fair value is never less than the amount payable on surrender (if applicable), discounted for the required notice period where applicable. 113 Ageas Annual Report 2021 114 | 240 Certain contracts contain financial guarantees, which are also valued at fair value and are included in liabilities related to unit-linked contracts, with the change in the fair value recognised in the income statement. Insurance risks are taken into account based on the actuarial assumptions. Deposits and withdrawals are recorded directly in the statement of financial position as adjustments to the liability, without affecting the income statement. Minimum guaranteed returns For Life insurance contracts with minimum guaranteed returns, the finance component is measured at amortised cost. Additional liabilities have been set up to reflect expected long-term interest rates. These additional liabilities are calculated as the difference between the present value and the carrying amount of the guaranteed amounts. During the accumulation period, the liabilities relating to annuity policies are equal to accumulated policyholder balances. After the accumulation period, the liabilities are equal to the present value of expected future payments. Changes in mortality tables that occurred in previous years are fully reflected in these liabilities. Discretionary Participation Features Most Life insurance or investment contracts contain a guaranteed benefit. Some of those contracts may also contain a Discretionary Participation Feature (DPF). This feature entitles the holder of the contract to receive, as a supplement to guaranteed benefits, additional benefits and bonuses:  That are likely to be a significant portion of the total contractual benefits;  Whose amount or timing is contractually at the discretion of Ageas;  That are contractually based on:  The performance of a specified pool of contracts or a specified type of contract;  Realised and/or unrealised investment returns on a specified pool of assets held by Ageas;  The profit or loss of Ageas, fund or other entity that issued the contract. For Life insurance contracts and investment contracts with DPF, current policyholder benefits are accrued based on the contractual amount due based on statutory net income, restrictions and payment terms. The DPF component concerns a conditional promise related to unrealised gains and losses. This promise remains therefore part of the unrealised gains and losses as included in equity. Once the promise becomes unconditional, the related amount is transferred to ‘Liabilities arising from Life insurance contracts’. Investment contracts without DPF are initially recognised at fair value and are subsequently measured at amortised cost and reported as a deposit liability. Embedded derivatives Embedded derivatives not closely related to the host contracts are separated from the host contracts and measured at fair value through profit or loss. Actuarial assumptions are revised at each reporting date with the resulting impact recognised in the income statement. Unbundling The deposit component of an insurance contract is unbundled when both of the following conditions are met: 1. The deposit component (including any embedded surrender options) can be measured separately (i.e. without taking into account the insurance component); and 2. Ageas’ accounting policies do not otherwise require the recognition of all obligations and rights arising from the deposit component. Currently, Ageas has recognised all rights and obligations related to issued insurance contracts according to its accounting policies. As a result, Ageas has not recognised an unbundled deposit component in respect of its insurance contracts. Non-life insurance Claims Claims and claim adjustment expenses are charged to the income statement as incurred. Unpaid claims and claim adjustment expenses include estimates for reported claims and provisions for claims incurred but not reported. The estimates for claims incurred but not reported are based on experience, current claim trends and the prevailing social, economic and legal environments. The liability for Non-life insurance claims and claim adjustment expenses is based on estimates of expected losses (after taking into account reimbursements, recoveries, salvage and subrogation), reflecting management’s judgement on anticipated levels of inflation, claim handling costs, legal risks and trends in compensatory damage awards. Non-life liabilities for workers’ compensation business are presented at their net present value. The liabilities established are adequate to cover the ultimate cost of claims and claim adjustment expenses. Resulting adjustments are recorded in the income statement. Ageas does not discount its liabilities for claims other than claims with determinable and period payment terms. 115 | 240 Liability Adequacy Test Ageas performs a Liability Adequacy Tests (LAT) at each reporting period to ensure that the reported insurance liabilities are adequate. A separate test is performed for:  Life liabilities and health similar-to-life liabilities, including annuities stemming from Non-life liabilities;  (Unearned) premium reserves stemming from Non-life liabilities and health non-similar-to-life liabilities; and  Claim provisions stemming from Non-life liabilities and health non- similar-to-life liabilities. For the purpose of these LAT tests, Ageas considers a best estimate valuation, being the present value of all contractual cash flows, including related cash flows such as commissions and expenses. The contract boundaries of Solvency II are applied, but are limited in Non-life to the ones in scope of the IFRS reserves. For Life insurance liabilities (and health similar-to-life liabilities including annuities stemming from Non-life), the LAT also includes cash flows resulting from embedded options and guarantees and investment income. Investment income is determined using the current book yield of the existing portfolio, based on the assumption that reinvestments after the maturity of the financial instruments will take place at a risk-free rate allowing a company specific volatility adjustment based on EIOPA methodology. For direct investments in real estate, the actual rental income up to the next contractual renewal period is taken into account. For Non-life insurance liabilities, the present value of all cash flows is determined using a risk-free discount rate allowing a company specific volatility adjustment based on EIOPA methodology (after the last liquid point, the so-called Ultimate Forward Rate extrapolation is applied). Any shortfall in the LAT is recognised immediately in the income statement, either as a DAC or VOBA -impairment or as a loss recognition. If, in a subsequent period, the shortfall decreases, the decrease in shortfall is reversed through profit or loss. A shortfall is defined as:  A negative net present value of the future margin for Life contracts and health similar-to-life contracts, including annuities stemming from Non-life contracts; and  The positive difference between the net present value of the cash flows and the corresponding IFRS reserves for Non-life contracts and health non-similar-to-life contracts. The LAT tests take into account the effect of reinsurance and include, for direct investments in real estate, the actual rental income up to the next contractual renewal period. LAT tests are determined at legal entity level. If a subsidiary’s local LAT requirements are stricter than the ones above, local entities apply the local requirements. Shadow accounting In some of Ageas’ businesses, the realisation of gains and losses has a direct impact on the measurement of the insurance liabilities and related deferred acquisition costs. In some of these businesses, Ageas applies ‘shadow accounting’ to the changes in fair value of available-for-sale investments and of assets and liabilities that affect the measurement of the insurance liabilities. Shadow accounting means that unrealised gains or losses on the available-for-sale financial assets, which are recognised in equity without affecting the income statement, affect the measurement of the insurance liabilities (or deferred acquisition costs or value of business acquired) in the same way as realised gains or losses would do. As part of shadow accounting, some of Ageas’ businesses extend the standard LAT with a shadow LAT test. Under the shadow LAT test, the amount of unrealised capital gains, recognised in other comprehensive income, in excess of the surplus resulting from the standard LAT, is recognised as a shadow liability. The remaining unrealised changes in fair value of the available-for-sale financial assets (after application of shadow accounting), that are subject to discretionary participation features, are classified as a separate component of equity. An additional Deferred Profit sharing Liability (DPL) is accrued based on a constructive obligation or on the amount legally or contractually required to be paid on differences between statutory and IFRS income and unrealised gains or losses recorded in equity. Reinsurance The accounting treatment of reinsurance contracts depends on whether significant insurance risk is transferred within the contract. Reinsurance contracts that transfer significant insurance risk are accounted for according to insurance contracts. Reinsurance contracts that do not transfer significant insurance risk are accounted for using the deposit method and are included in loans or borrowings as a financial asset or liability. Such financial asset or liability is recognised based on the consideration paid or received less any explicitly identified premiums or fees to be retained by the reinsured. Amounts received or paid under these contracts are accounted for as deposits using the effective interest method. GENERAL NOTES 114 Ageas Annual Report 2021 114 | 240 Certain contracts contain financial guarantees, which are also valued at fair value and are included in liabilities related to unit-linked contracts, with the change in the fair value recognised in the income statement. Insurance risks are taken into account based on the actuarial assumptions. Deposits and withdrawals are recorded directly in the statement of financial position as adjustments to the liability, without affecting the income statement. Minimum guaranteed returns For Life insurance contracts with minimum guaranteed returns, the finance component is measured at amortised cost. Additional liabilities have been set up to reflect expected long-term interest rates. These additional liabilities are calculated as the difference between the present value and the carrying amount of the guaranteed amounts. During the accumulation period, the liabilities relating to annuity policies are equal to accumulated policyholder balances. After the accumulation period, the liabilities are equal to the present value of expected future payments. Changes in mortality tables that occurred in previous years are fully reflected in these liabilities. Discretionary Participation Features Most Life insurance or investment contracts contain a guaranteed benefit. Some of those contracts may also contain a Discretionary Participation Feature (DPF). This feature entitles the holder of the contract to receive, as a supplement to guaranteed benefits, additional benefits and bonuses:  That are likely to be a significant portion of the total contractual benefits;  Whose amount or timing is contractually at the discretion of Ageas;  That are contractually based on:  The performance of a specified pool of contracts or a specified type of contract;  Realised and/or unrealised investment returns on a specified pool of assets held by Ageas;  The profit or loss of Ageas, fund or other entity that issued the contract. For Life insurance contracts and investment contracts with DPF, current policyholder benefits are accrued based on the contractual amount due based on statutory net income, restrictions and payment terms. The DPF component concerns a conditional promise related to unrealised gains and losses. This promise remains therefore part of the unrealised gains and losses as included in equity. Once the promise becomes unconditional, the related amount is transferred to ‘Liabilities arising from Life insurance contracts’. Investment contracts without DPF are initially recognised at fair value and are subsequently measured at amortised cost and reported as a deposit liability. Embedded derivatives Embedded derivatives not closely related to the host contracts are separated from the host contracts and measured at fair value through profit or loss. Actuarial assumptions are revised at each reporting date with the resulting impact recognised in the income statement. Unbundling The deposit component of an insurance contract is unbundled when both of the following conditions are met: 1. The deposit component (including any embedded surrender options) can be measured separately (i.e. without taking into account the insurance component); and 2. Ageas’ accounting policies do not otherwise require the recognition of all obligations and rights arising from the deposit component. Currently, Ageas has recognised all rights and obligations related to issued insurance contracts according to its accounting policies. As a result, Ageas has not recognised an unbundled deposit component in respect of its insurance contracts. Non-life insurance Claims Claims and claim adjustment expenses are charged to the income statement as incurred. Unpaid claims and claim adjustment expenses include estimates for reported claims and provisions for claims incurred but not reported. The estimates for claims incurred but not reported are based on experience, current claim trends and the prevailing social, economic and legal environments. The liability for Non-life insurance claims and claim adjustment expenses is based on estimates of expected losses (after taking into account reimbursements, recoveries, salvage and subrogation), reflecting management’s judgement on anticipated levels of inflation, claim handling costs, legal risks and trends in compensatory damage awards. Non-life liabilities for workers’ compensation business are presented at their net present value. The liabilities established are adequate to cover the ultimate cost of claims and claim adjustment expenses. Resulting adjustments are recorded in the income statement. Ageas does not discount its liabilities for claims other than claims with determinable and period payment terms. 115 | 240 Liability Adequacy Test Ageas performs a Liability Adequacy Tests (LAT) at each reporting period to ensure that the reported insurance liabilities are adequate. A separate test is performed for:  Life liabilities and health similar-to-life liabilities, including annuities stemming from Non-life liabilities;  (Unearned) premium reserves stemming from Non-life liabilities and health non-similar-to-life liabilities; and  Claim provisions stemming from Non-life liabilities and health non- similar-to-life liabilities. For the purpose of these LAT tests, Ageas considers a best estimate valuation, being the present value of all contractual cash flows, including related cash flows such as commissions and expenses. The contract boundaries of Solvency II are applied, but are limited in Non-life to the ones in scope of the IFRS reserves. For Life insurance liabilities (and health similar-to-life liabilities including annuities stemming from Non-life), the LAT also includes cash flows resulting from embedded options and guarantees and investment income. Investment income is determined using the current book yield of the existing portfolio, based on the assumption that reinvestments after the maturity of the financial instruments will take place at a risk-free rate allowing a company specific volatility adjustment based on EIOPA methodology. For direct investments in real estate, the actual rental income up to the next contractual renewal period is taken into account. For Non-life insurance liabilities, the present value of all cash flows is determined using a risk-free discount rate allowing a company specific volatility adjustment based on EIOPA methodology (after the last liquid point, the so-called Ultimate Forward Rate extrapolation is applied). Any shortfall in the LAT is recognised immediately in the income statement, either as a DAC or VOBA -impairment or as a loss recognition. If, in a subsequent period, the shortfall decreases, the decrease in shortfall is reversed through profit or loss. A shortfall is defined as:  A negative net present value of the future margin for Life contracts and health similar-to-life contracts, including annuities stemming from Non-life contracts; and  The positive difference between the net present value of the cash flows and the corresponding IFRS reserves for Non-life contracts and health non-similar-to-life contracts. The LAT tests take into account the effect of reinsurance and include, for direct investments in real estate, the actual rental income up to the next contractual renewal period. LAT tests are determined at legal entity level. If a subsidiary’s local LAT requirements are stricter than the ones above, local entities apply the local requirements. Shadow accounting In some of Ageas’ businesses, the realisation of gains and losses has a direct impact on the measurement of the insurance liabilities and related deferred acquisition costs. In some of these businesses, Ageas applies ‘shadow accounting’ to the changes in fair value of available-for-sale investments and of assets and liabilities that affect the measurement of the insurance liabilities. Shadow accounting means that unrealised gains or losses on the available-for-sale financial assets, which are recognised in equity without affecting the income statement, affect the measurement of the insurance liabilities (or deferred acquisition costs or value of business acquired) in the same way as realised gains or losses would do. As part of shadow accounting, some of Ageas’ businesses extend the standard LAT with a shadow LAT test. Under the shadow LAT test, the amount of unrealised capital gains, recognised in other comprehensive income, in excess of the surplus resulting from the standard LAT, is recognised as a shadow liability. The remaining unrealised changes in fair value of the available-for-sale financial assets (after application of shadow accounting), that are subject to discretionary participation features, are classified as a separate component of equity. An additional Deferred Profit sharing Liability (DPL) is accrued based on a constructive obligation or on the amount legally or contractually required to be paid on differences between statutory and IFRS income and unrealised gains or losses recorded in equity. Reinsurance The accounting treatment of reinsurance contracts depends on whether significant insurance risk is transferred within the contract. Reinsurance contracts that transfer significant insurance risk are accounted for according to insurance contracts. Reinsurance contracts that do not transfer significant insurance risk are accounted for using the deposit method and are included in loans or borrowings as a financial asset or liability. Such financial asset or liability is recognised based on the consideration paid or received less any explicitly identified premiums or fees to be retained by the reinsured. Amounts received or paid under these contracts are accounted for as deposits using the effective interest method. 115 Ageas Annual Report 2021 116 | 240 Deposits from reinsurers under ceded reinsurance, that transfer significant insurance risk, equal the amount due at the date of the statement of financial position. Liabilities relating to ceded reinsurance business, that do not transfer significant insurance risk, may be considered to be financial liabilities and the liabilities are accounted for in the same way as other financial liabilities. 2.8.12 Debt certificates, subordinated liabilities and other borrowings Debt certificates, subordinated liabilities and other borrowings are initially recognised at fair value including direct transaction costs incurred. Subsequently, they are measured at amortised cost, and any difference between net proceeds and the redemption value is recognised in the income statement over the period of the borrowing, using the effective interest method. Debt that can be converted into a fixed number of Ageas’ own shares is separated into two components on initial recognition: a) A liability instrument, determined by measuring the fair value of a similar liability (including any embedded non-equity derivative features) that do not have an associated equity component; and b) An equity instrument, of which the carrying amount represents the option to convert the instrument into common shares, determined by deducting the carrying amount of the financial liability from the amount of the compound instrument as a whole. If Ageas redeems the debt certificates, subordinated liabilities and other borrowings, these are removed from the statement of financial position and the difference between the carrying amount of the liability and the consideration paid is included in the income statement. 2.8.13 Employee benefits Pension liabilities Ageas operates a number of defined benefit and defined contribution pension plans throughout its global activities, in accordance with local conditions or industry practices. The pension plans are generally funded through payments to insurance companies or to trustee administered plans. The funding is determined by periodic actuarial calculations. Qualified actuaries calculate the pension assets and liabilities at least annually. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependant on one or more factors such as age and years of service. A defined contribution plan is a pension plan under which Ageas pays fixed contributions. However, under IAS 19, a defined contribution plan with a guaranteed return is treated as a defined benefit plan instead of a defined contribution plan due to the (legally determined) guaranteed return included in those plans. For defined benefit plans, the pension costs and related pension assets or liabilities are estimated using the Projected Unit Credit method (PUC). Under this method:  Each period of service gives rise to an additional unit of benefit entitlement and each unit is measured separately in order to build up the final liability;  The cost of providing these benefits is charged to the income statement to spread the pension cost over the service lives of the employees;  The pension liability is measured at the present value of the estimated future cash outflows using interest rates determined by reference to market yields on high quality corporate bonds, which have terms to maturity approximating the terms of the related liability. Remeasurements, comprising actuarial gains and losses, the effect of the asset ceiling and the return on plan assets (excluding net interest), are recognised immediately in the statement of financial position through other comprehensive income in the reporting period in which they occur. Remeasurements are not reclassified to the income statement in subsequent periods. Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. Past service costs are recognised in profit or loss on the earlier of:  The date of the plan amendment or curtailment; and  The date that Ageas recognises restructuring-related costs. Assets that support the pension liabilities of an entity, must meet certain criteria in order to be classified as ‘qualifying pension plan assets’. These criteria relate to the fact that these assets should be legally separate from Ageas or its creditors. If this is not the case, the assets are included in the relevant item on the statement of financial position (such as investments or property, plant and equipment). If the assets meet the criteria, these assets are netted against the pension liability. When the fair value of the plan assets is netted against the present value of the obligation of a defined benefit plan, the resulting amount could be negative (an asset). If this is the case, the recognised asset cannot exceed the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan (‘asset ceiling’). Benefit plans that provide long-term service benefits, but that are not pension plans, are measured at present value, using the projected unit credit method. Ageas’ contributions to defined contribution pension plans are charged to the income statement in the year to which they relate, except for defined contribution plans with a guaranteed return, that follow the accounting treatment of a defined benefit plan. 117 | 240 Other post-retirement liabilities Some of the Ageas companies provide post-retirement employee benefits to retirees, such as preferential interest rate loans and health care insurance. Entitlement to these benefits is usually based on the employee remaining in service up to retirement age and the completion of a minimum service period. Expected costs of these benefits are accrued over the period of employment, using a methodology similar to that for defined benefit pension plans. These liabilities are determined based on actuarial calculations. Equity options and equity participation plans Share options and restricted shares, both equity settled and cash settled plans, are granted to directors and employees for services received. The fair value of the services received is determined by reference to the fair value of the share options and restricted shares granted. The expense of equity options and equity participation plans is measured at the grant date based on the fair value of the options and restricted shares and is recognised in the income statement, either immediately at grant date if there is no vesting period, or over the vesting period of the options and restricted shares. Equity settled plans are accounted for as an increase in equity and are remeasured for the number of shares until the vesting conditions are met. Cash settled plans are accounted for as an increase in liabilities and are remeasured both for:  The number of shares until the vesting conditions are met; and  The change in the fair value of the restricted shares. Remeasured expenses are recognised in the income statement during the vesting period. Expenses related to current and past periods are directly recognised in the income statement. The fair value of the share options is determined using an option-pricing model that takes into account the following:  The stock price at the grant date;  The exercise price;  The expected life of the option;  The expected volatility of the underlying stock and expected dividends on it; and  The risk-free interest rate over the expected life of the option. When the options are exercised and new shares are issued, the proceeds received, net of any transaction costs, are credited to share capital (par value) and the surplus to share premium. If for this purpose own shares have been repurchased, these will be eliminated from treasury stock. Employee entitlements Employee entitlements to annual leave and long-service leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave and long-service leave as a result of services rendered by employees up to the date of the statement of financial position. 2.8.14 Provisions and contingencies Provisions Provisions are liabilities involving uncertainties in the amount or timing of payment. Provisions are recognised if there is a present obligation (legal or constructive) to transfer economic benefits, such as cash flows, as a result of past events and if a reliable estimate can be made at the date of the statement of financial position. Provisions are established for certain guarantee contracts for which Ageas is responsible to pay upon default of payment. Provisions are estimated based on all relevant factors and information existing at the date of the statement of financial position, and are typically discounted at the risk-free rate. Contingencies Contingencies are those uncertainties of which an amount cannot be reasonably estimated or when it is not probable that payment will be required to settle the obligation. 2.8.15 Equity components Share capital and share issue costs Incremental costs directly attributable to the issue of new shares or share options, other than on a business combination, are deducted from equity net of any related income taxes. Treasury shares When the Parent Company or its subsidiaries purchase Ageas share capital or obtain rights to purchase Ageas share capital, the consideration paid including any attributable transaction costs, net of income taxes, is shown as a deduction from equity. Dividends paid on treasury shares held by Ageas companies are eliminated when preparing the consolidated financial statements. Ageas shares held by Ageasfinlux S.A., in the context of FRESH capital securities, are not entitled to dividend or capital. These shares are eliminated in calculating dividend, net profit and equity per share. The cost price of the shares is deducted from equity. Compound financial instruments Components of compound financial instruments (liability and equity parts) are classified in their respective area of the statement of financial position. GENERAL NOTES 116 Ageas Annual Report 2021 116 | 240 Deposits from reinsurers under ceded reinsurance, that transfer significant insurance risk, equal the amount due at the date of the statement of financial position. Liabilities relating to ceded reinsurance business, that do not transfer significant insurance risk, may be considered to be financial liabilities and the liabilities are accounted for in the same way as other financial liabilities. 2.8.12 Debt certificates, subordinated liabilities and other borrowings Debt certificates, subordinated liabilities and other borrowings are initially recognised at fair value including direct transaction costs incurred. Subsequently, they are measured at amortised cost, and any difference between net proceeds and the redemption value is recognised in the income statement over the period of the borrowing, using the effective interest method. Debt that can be converted into a fixed number of Ageas’ own shares is separated into two components on initial recognition: a) A liability instrument, determined by measuring the fair value of a similar liability (including any embedded non-equity derivative features) that do not have an associated equity component; and b) An equity instrument, of which the carrying amount represents the option to convert the instrument into common shares, determined by deducting the carrying amount of the financial liability from the amount of the compound instrument as a whole. If Ageas redeems the debt certificates, subordinated liabilities and other borrowings, these are removed from the statement of financial position and the difference between the carrying amount of the liability and the consideration paid is included in the income statement. 2.8.13 Employee benefits Pension liabilities Ageas operates a number of defined benefit and defined contribution pension plans throughout its global activities, in accordance with local conditions or industry practices. The pension plans are generally funded through payments to insurance companies or to trustee administered plans. The funding is determined by periodic actuarial calculations. Qualified actuaries calculate the pension assets and liabilities at least annually. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependant on one or more factors such as age and years of service. A defined contribution plan is a pension plan under which Ageas pays fixed contributions. However, under IAS 19, a defined contribution plan with a guaranteed return is treated as a defined benefit plan instead of a defined contribution plan due to the (legally determined) guaranteed return included in those plans. For defined benefit plans, the pension costs and related pension assets or liabilities are estimated using the Projected Unit Credit method (PUC). Under this method:  Each period of service gives rise to an additional unit of benefit entitlement and each unit is measured separately in order to build up the final liability;  The cost of providing these benefits is charged to the income statement to spread the pension cost over the service lives of the employees;  The pension liability is measured at the present value of the estimated future cash outflows using interest rates determined by reference to market yields on high quality corporate bonds, which have terms to maturity approximating the terms of the related liability. Remeasurements, comprising actuarial gains and losses, the effect of the asset ceiling and the return on plan assets (excluding net interest), are recognised immediately in the statement of financial position through other comprehensive income in the reporting period in which they occur. Remeasurements are not reclassified to the income statement in subsequent periods. Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. Past service costs are recognised in profit or loss on the earlier of:  The date of the plan amendment or curtailment; and  The date that Ageas recognises restructuring-related costs. Assets that support the pension liabilities of an entity, must meet certain criteria in order to be classified as ‘qualifying pension plan assets’. These criteria relate to the fact that these assets should be legally separate from Ageas or its creditors. If this is not the case, the assets are included in the relevant item on the statement of financial position (such as investments or property, plant and equipment). If the assets meet the criteria, these assets are netted against the pension liability. When the fair value of the plan assets is netted against the present value of the obligation of a defined benefit plan, the resulting amount could be negative (an asset). If this is the case, the recognised asset cannot exceed the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan (‘asset ceiling’). Benefit plans that provide long-term service benefits, but that are not pension plans, are measured at present value, using the projected unit credit method. Ageas’ contributions to defined contribution pension plans are charged to the income statement in the year to which they relate, except for defined contribution plans with a guaranteed return, that follow the accounting treatment of a defined benefit plan. 117 | 240 Other post-retirement liabilities Some of the Ageas companies provide post-retirement employee benefits to retirees, such as preferential interest rate loans and health care insurance. Entitlement to these benefits is usually based on the employee remaining in service up to retirement age and the completion of a minimum service period. Expected costs of these benefits are accrued over the period of employment, using a methodology similar to that for defined benefit pension plans. These liabilities are determined based on actuarial calculations. Equity options and equity participation plans Share options and restricted shares, both equity settled and cash settled plans, are granted to directors and employees for services received. The fair value of the services received is determined by reference to the fair value of the share options and restricted shares granted. The expense of equity options and equity participation plans is measured at the grant date based on the fair value of the options and restricted shares and is recognised in the income statement, either immediately at grant date if there is no vesting period, or over the vesting period of the options and restricted shares. Equity settled plans are accounted for as an increase in equity and are remeasured for the number of shares until the vesting conditions are met. Cash settled plans are accounted for as an increase in liabilities and are remeasured both for:  The number of shares until the vesting conditions are met; and  The change in the fair value of the restricted shares. Remeasured expenses are recognised in the income statement during the vesting period. Expenses related to current and past periods are directly recognised in the income statement. The fair value of the share options is determined using an option-pricing model that takes into account the following:  The stock price at the grant date;  The exercise price;  The expected life of the option;  The expected volatility of the underlying stock and expected dividends on it; and  The risk-free interest rate over the expected life of the option. When the options are exercised and new shares are issued, the proceeds received, net of any transaction costs, are credited to share capital (par value) and the surplus to share premium. If for this purpose own shares have been repurchased, these will be eliminated from treasury stock. Employee entitlements Employee entitlements to annual leave and long-service leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave and long-service leave as a result of services rendered by employees up to the date of the statement of financial position. 2.8.14 Provisions and contingencies Provisions Provisions are liabilities involving uncertainties in the amount or timing of payment. Provisions are recognised if there is a present obligation (legal or constructive) to transfer economic benefits, such as cash flows, as a result of past events and if a reliable estimate can be made at the date of the statement of financial position. Provisions are established for certain guarantee contracts for which Ageas is responsible to pay upon default of payment. Provisions are estimated based on all relevant factors and information existing at the date of the statement of financial position, and are typically discounted at the risk-free rate. Contingencies Contingencies are those uncertainties of which an amount cannot be reasonably estimated or when it is not probable that payment will be required to settle the obligation. 2.8.15 Equity components Share capital and share issue costs Incremental costs directly attributable to the issue of new shares or share options, other than on a business combination, are deducted from equity net of any related income taxes. Treasury shares When the Parent Company or its subsidiaries purchase Ageas share capital or obtain rights to purchase Ageas share capital, the consideration paid including any attributable transaction costs, net of income taxes, is shown as a deduction from equity. Dividends paid on treasury shares held by Ageas companies are eliminated when preparing the consolidated financial statements. Ageas shares held by Ageasfinlux S.A., in the context of FRESH capital securities, are not entitled to dividend or capital. These shares are eliminated in calculating dividend, net profit and equity per share. The cost price of the shares is deducted from equity. Compound financial instruments Components of compound financial instruments (liability and equity parts) are classified in their respective area of the statement of financial position. 117 Ageas Annual Report 2021 118 | 240 Other equity components Other elements recorded in equity relate to:  Direct equity movements of associates (see paragraph 2.6);  Foreign currency (see paragraph 2.7);  Available-for-sale investments (see paragraph 2.8.1);  Cash flow hedges (see paragraph 2.8.2);  Discretionary participation features (see paragraph 2.8.11);  Actuarial gains and losses on defined benefit plans (see paragraph 2.8.13);  Share options and restricted share plans (see paragraph 2.8.13); and  Dividend, treasury shares and cancellation of shares. 2.8.16 Gross premium income Short-duration versus long-duration contracts A short-duration insurance contract is a contract that provides insurance protection for a fixed period of short duration and that enables the insurer to cancel the contract or to adjust the terms of the contract at the end of any contract period. A long-duration contract is a contract that generally is not subject to unilateral changes in its terms, such as a non-cancellable or guaranteed renewable contract, and that requires the performance of various functions and services (including insurance protection) for an extended period. Premium income when received Premiums from Life insurance contracts and long-duration investment contracts with Discretionary Participation Features are recognised as revenue when due from the policyholder. Estimated future benefits and expenses are offset against such revenue in order to recognise profits over the estimated life of the policies. This matching is accomplished by the establishment of liabilities arising from insurance contracts and investment contracts with Discretionary Participation Features, and by the deferral and subsequent amortisation of upfront expenses such as policy acquisition costs. Premium income when earned For short-duration type contracts (principally in Non-life), premiums are recorded as written upon inception of the contract. Premiums are recognised in the income statement as earned on a pro-rata basis over the term of the related policy coverage. The unearned premium reserve represents the portion of the premiums written relating to the unexpired terms of the coverage. 2.8.17 Interest, dividend and other investment income For all interest-bearing instruments (whether classified as held-to- maturity, available-for-sale, held at fair value through profit or loss, derivatives or other assets or liabilities), interest income and interest expense is recognised in the income statement on an accrual basis, using the effective interest method based on the actual purchase price including direct transaction costs. Interest income includes coupons earned on fixed and floating rate income instruments and the accretion or amortisation of the transaction costs, premium or discount. Once a financial asset has been written down to its estimated recoverable amount, interest income is subsequently recognised based on the effective interest rate that was used to discount the future cash flows for the purpose of measuring the recoverable amount. Dividends are recognised in the income statement when they are declared. Ageas acts as a lessor under non-cancellable lease contracts that may contain renewal options for investment property and certain properties held for own use. Rental income and other income is recognised, net of lease incentives granted to lessees, on a straight line basis, unless there is compelling evidence that benefits do not accrue evenly over the period of the lease. 2.8.18 Realised and unrealised gains and losses For financial instruments classified as available-for-sale, realised gains or losses on sales and divestments represent the difference between the proceeds received and the initial book value of the asset sold, minus any impairment losses recognised in the income statement, and after adjustment for the impact of any hedge accounting. Realised gains and losses on sales are included in the income statement under ‘Result on sales and revaluations’. For financial instruments measured at fair value through profit or loss, the difference between the carrying value at the end of the current reporting period versus the previous reporting period is included in the income statement under ‘Result on sales and revaluations’. For derivatives, the difference between the carrying clean fair value (i.e. excluding the unrealised portion of the interest accruals) at the end of the current reporting period versus the previous reporting period is included in the income statement under ‘Results on sales and revaluations’. Upon derecognition or upon impairment of a financial asset, the unrealised gains and losses previously recognised directly in equity are recycled through the income statement. 2.8.19 Fee and commission income Fees as integral part of effective interest rate Fees that are an integral part of the effective interest rate of a financial instrument are generally treated as an adjustment to the effective interest rate. This is the case for origination fees, received as compensation for activities such as evaluating the borrower’s financial condition, evaluating and recording guarantees, etc. and also for origination fees received on issuing financial liabilities measured at amortised cost. Both types of fees are deferred and are recognised as an adjustment to the effective interest rate of the underlying financial instrument, measured at amortised cost. 119 | 240 Ageas Annual Report 2021 ● 119 When the financial instrument is measured at fair value through profit or loss, the fees are recognised as revenue when the instrument is initially recognised. Fees recognised as services are provided Fees are generally recognised as revenue as the services are provided. If it is unlikely that a specific lending arrangement will be entered into and the loan commitment is not considered a derivative, the commitment fee is recognised as revenue on a time proportion basis over the commitment period. Reinsurance commissions are recognised as earned, reinsurance participation features are recognised as revenue upon receipt. Fees recognised upon completion of the underlying transaction Fees arising from negotiating or participating in the negotiation of a transaction for a third party, are recognised upon completion of the underlying transaction. Commission revenue is recognised when the performance obligation is complete. Loan syndication fees are recognised as revenue when the syndication has been completed. Fee from investment contracts Revenues from investment contracts, of which the covered insurance risk is not significant, consist of fees for the coverage of insurance, administration fees and surrender charges. Fees are recognised as revenue as the services are provided. Expenses include mortality claims and interest credited. 2.8.20 Income tax Current tax Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period. Income tax payable on profits is recognised as an expense based on the applicable tax laws in each jurisdiction in the period in which profits arise. The tax effects of income tax losses available for carry-forward are recognised as a deferred tax asset if it is probable that future taxable profit will be available against which those losses can be utilised. If a legal entity assesses that it is not probable that the relevant taxation authority will accept the tax treatment applied, that legal entity reflects the effect of uncertainty for each uncertain tax treatment by using either the most likely amount or the expected value based on a range of possible outcomes, depending on which method better predicts the resolution of the uncertainty. Deferred tax Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences. Deferred tax assets are the amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carry forward of unused tax losses and of unused tax credits. Deferred tax is provided in full, using the statement of financial position liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Consolidated Financial Statements. The rates enacted or substantively enacted at the date of the statement of financial position are used to determine the deferred taxes. Deferred tax assets are recognised to the extent that it is probable that sufficient future taxable profit will be available to allow the benefit of part or the entire deferred tax asset to be utilised. Deferred tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries, associates, and joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the difference will not reverse in the foreseeable future. Current and deferred tax related to fair value remeasurement of items in the statement of financial position which are charged or credited directly to equity (such as available-for-sale investments and cash-flow hedges) is also credited or charged directly to equity and is subsequently recognised in the income statement together with the deferred gain or loss. 2.8.21 Earnings per share Basic earnings per share are calculated by dividing net result attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year, excluding the average number of ordinary shares purchased by Ageas and held as treasury shares. For the diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares, such as convertible debt, preferred shares, share options and restricted shares granted to employees. Potential or contingent share issuances are treated as dilutive when their conversion to shares would decrease net earnings per share. The impact of discontinued operations on the basic and diluted earnings per share is shown by dividing net result before discontinued operations by the weighted average number of ordinary shares in issue during the year, excluding the average number of ordinary shares purchased by Ageas and held as treasury shares. GENERAL NOTES 118 Ageas Annual Report 2021 118 | 240 Other equity components Other elements recorded in equity relate to:  Direct equity movements of associates (see paragraph 2.6);  Foreign currency (see paragraph 2.7);  Available-for-sale investments (see paragraph 2.8.1);  Cash flow hedges (see paragraph 2.8.2);  Discretionary participation features (see paragraph 2.8.11);  Actuarial gains and losses on defined benefit plans (see paragraph 2.8.13);  Share options and restricted share plans (see paragraph 2.8.13); and  Dividend, treasury shares and cancellation of shares. 2.8.16 Gross premium income Short-duration versus long-duration contracts A short-duration insurance contract is a contract that provides insurance protection for a fixed period of short duration and that enables the insurer to cancel the contract or to adjust the terms of the contract at the end of any contract period. A long-duration contract is a contract that generally is not subject to unilateral changes in its terms, such as a non-cancellable or guaranteed renewable contract, and that requires the performance of various functions and services (including insurance protection) for an extended period. Premium income when received Premiums from Life insurance contracts and long-duration investment contracts with Discretionary Participation Features are recognised as revenue when due from the policyholder. Estimated future benefits and expenses are offset against such revenue in order to recognise profits over the estimated life of the policies. This matching is accomplished by the establishment of liabilities arising from insurance contracts and investment contracts with Discretionary Participation Features, and by the deferral and subsequent amortisation of upfront expenses such as policy acquisition costs. Premium income when earned For short-duration type contracts (principally in Non-life), premiums are recorded as written upon inception of the contract. Premiums are recognised in the income statement as earned on a pro-rata basis over the term of the related policy coverage. The unearned premium reserve represents the portion of the premiums written relating to the unexpired terms of the coverage. 2.8.17 Interest, dividend and other investment income For all interest-bearing instruments (whether classified as held-to- maturity, available-for-sale, held at fair value through profit or loss, derivatives or other assets or liabilities), interest income and interest expense is recognised in the income statement on an accrual basis, using the effective interest method based on the actual purchase price including direct transaction costs. Interest income includes coupons earned on fixed and floating rate income instruments and the accretion or amortisation of the transaction costs, premium or discount. Once a financial asset has been written down to its estimated recoverable amount, interest income is subsequently recognised based on the effective interest rate that was used to discount the future cash flows for the purpose of measuring the recoverable amount. Dividends are recognised in the income statement when they are declared. Ageas acts as a lessor under non-cancellable lease contracts that may contain renewal options for investment property and certain properties held for own use. Rental income and other income is recognised, net of lease incentives granted to lessees, on a straight line basis, unless there is compelling evidence that benefits do not accrue evenly over the period of the lease. 2.8.18 Realised and unrealised gains and losses For financial instruments classified as available-for-sale, realised gains or losses on sales and divestments represent the difference between the proceeds received and the initial book value of the asset sold, minus any impairment losses recognised in the income statement, and after adjustment for the impact of any hedge accounting. Realised gains and losses on sales are included in the income statement under ‘Result on sales and revaluations’. For financial instruments measured at fair value through profit or loss, the difference between the carrying value at the end of the current reporting period versus the previous reporting period is included in the income statement under ‘Result on sales and revaluations’. For derivatives, the difference between the carrying clean fair value (i.e. excluding the unrealised portion of the interest accruals) at the end of the current reporting period versus the previous reporting period is included in the income statement under ‘Results on sales and revaluations’. Upon derecognition or upon impairment of a financial asset, the unrealised gains and losses previously recognised directly in equity are recycled through the income statement. 2.8.19 Fee and commission income Fees as integral part of effective interest rate Fees that are an integral part of the effective interest rate of a financial instrument are generally treated as an adjustment to the effective interest rate. This is the case for origination fees, received as compensation for activities such as evaluating the borrower’s financial condition, evaluating and recording guarantees, etc. and also for origination fees received on issuing financial liabilities measured at amortised cost. Both types of fees are deferred and are recognised as an adjustment to the effective interest rate of the underlying financial instrument, measured at amortised cost. 119 | 240 Ageas Annual Report 2021 ● 119 When the financial instrument is measured at fair value through profit or loss, the fees are recognised as revenue when the instrument is initially recognised. Fees recognised as services are provided Fees are generally recognised as revenue as the services are provided. If it is unlikely that a specific lending arrangement will be entered into and the loan commitment is not considered a derivative, the commitment fee is recognised as revenue on a time proportion basis over the commitment period. Reinsurance commissions are recognised as earned, reinsurance participation features are recognised as revenue upon receipt. Fees recognised upon completion of the underlying transaction Fees arising from negotiating or participating in the negotiation of a transaction for a third party, are recognised upon completion of the underlying transaction. Commission revenue is recognised when the performance obligation is complete. Loan syndication fees are recognised as revenue when the syndication has been completed. Fee from investment contracts Revenues from investment contracts, of which the covered insurance risk is not significant, consist of fees for the coverage of insurance, administration fees and surrender charges. Fees are recognised as revenue as the services are provided. Expenses include mortality claims and interest credited. 2.8.20 Income tax Current tax Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period. Income tax payable on profits is recognised as an expense based on the applicable tax laws in each jurisdiction in the period in which profits arise. The tax effects of income tax losses available for carry-forward are recognised as a deferred tax asset if it is probable that future taxable profit will be available against which those losses can be utilised. If a legal entity assesses that it is not probable that the relevant taxation authority will accept the tax treatment applied, that legal entity reflects the effect of uncertainty for each uncertain tax treatment by using either the most likely amount or the expected value based on a range of possible outcomes, depending on which method better predicts the resolution of the uncertainty. Deferred tax Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences. Deferred tax assets are the amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carry forward of unused tax losses and of unused tax credits. Deferred tax is provided in full, using the statement of financial position liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Consolidated Financial Statements. The rates enacted or substantively enacted at the date of the statement of financial position are used to determine the deferred taxes. Deferred tax assets are recognised to the extent that it is probable that sufficient future taxable profit will be available to allow the benefit of part or the entire deferred tax asset to be utilised. Deferred tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries, associates, and joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the difference will not reverse in the foreseeable future. Current and deferred tax related to fair value remeasurement of items in the statement of financial position which are charged or credited directly to equity (such as available-for-sale investments and cash-flow hedges) is also credited or charged directly to equity and is subsequently recognised in the income statement together with the deferred gain or loss. 2.8.21 Earnings per share Basic earnings per share are calculated by dividing net result attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year, excluding the average number of ordinary shares purchased by Ageas and held as treasury shares. For the diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares, such as convertible debt, preferred shares, share options and restricted shares granted to employees. Potential or contingent share issuances are treated as dilutive when their conversion to shares would decrease net earnings per share. The impact of discontinued operations on the basic and diluted earnings per share is shown by dividing net result before discontinued operations by the weighted average number of ordinary shares in issue during the year, excluding the average number of ordinary shares purchased by Ageas and held as treasury shares. 119 Ageas Annual Report 2021 120 | 240 The following significant acquisitions and disposals were made in 2021 and 2020. Details of acquisitions and disposals, if any, which took place after the date of the statement of financial position, are included in note 44 Events after the date of the statement of financial position. 3.1 Acquisitions in 2021 AgeSA (formerly: AvivaSA) (CEU) On 5 May 2021, Ageas announced that it had obtained all regulatory approvals and completed its acquisition from Aviva plc, a 40% stake in the Turkish listed life insurance and pensions company AgeSA. The cash consideration amounted to GBP 119 million (EUR 143 million including transaction costs). AgeSA is accounted for using the equity method. AG Insurance (Belgium) In 2021, AG Insurance increased its interest in CCN (Centre de Communication Nord, mixed redevelopment project in Brussels) from 5% to 50%. This associate is still accounted for using the equity method. 3.2 Disposals in 2021 Tesco Underwriting Ltd. (TU) (UK) On 14 October 2020, Ageas announced an agreement for Tesco Bank to buy Ageas’s 50.1% stake in associate Tesco Underwriting Limited. Accordingly, the carrying amount of the associate was presented as held for sale in the 2020 financial statements. The sale was completed on 4 May 2021 for a cash consideration of GBP 112 million. The impact of the sale on the results of the first 6 months of 2021 was a profit of EUR 4.2 million. This gain is spread over across the income statement captions ‘Interest, dividend and other investment income’ and ‘Results on sales and revaluations’. AG Insurance (Belgium) In 2021, Transimmo was fully consolidated by AG Insurance and was no longer accounted for using the equity method. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 3 Acquisitions and disposals 121 | 240 3.3 Acquisitions in 2020 Taiping Reinsurance Co. Ltd. (TPRe) (Asia) On 27 November 2020, Ageas acquired a 24.99% interest in Taiping Reinsurance Company Limited (TPRe) by subscribing to a capital increase of HKD 3 billion (EUR 336 million). TPRe is a subsidiary of China Taiping Insurance Holdings (CTIH). The interest in associate TPRe is accounted for using the equity method. Additional acquisition in IFLIC (Asia) On 30 December 2020, Ageas acquired an additional 23% stake in the Indian Life insurance joint venture IDBI Federal Life Insurance Company Ltd. (IFLIC) for a consideration of INR 5.1 billion (EUR 58 million including transaction costs). With this transaction, Ageas increased its interest in IFLIC to 49% and became the largest shareholder in the joint venture it operates together with IDBI Bank and Federal Bank. Ageas continues to account for the associate using the equity method. Following the transaction IFLIC was rebranded to Ageas Federal Life Insurance Company. 3.4 Disposals in 2020 AG Insurance (Belgium) In the second quarter of 2020, a loss of control in the Sicav Equities Euro resulted in the deconsolidation of this entity, leading to a capital gain of EUR 26 million. In the third quarter of 2020, AG Insurance sold the equity associate SCI Frey Retail Fund 2 for an amount of EUR 41 million, realising a capital gain of EUR 8 million. In the last quarter of 2020, AG Insurance sold their interests in the equity associate BG1 for a total consideration of EUR 125 million, realising a capital gain of EUR 32 million. 3.5 Assets and liabilities of acquisitions and disposals The table below provides details of the assets and liabilities resulting from the acquisition or disposal of subsidiaries and/or equity accounted investments at the date of acquisition or disposal. 2021 2020 Acquisitions Disposals Acquisitions Disposals Assets and liabilities of acquisitions and disposals Cash and cash equivalents 7 (6) Financial investments 5 Investment property 34 33 Investments in associates including capital (re)payments 202 (171) 427 (141) Accrued interest and other liabilities 2 13 Non-controlling interests 1 7 Other (5) (27) Net assets acquired / Net assets disposed of 233 (176) 447 (115) Result of disposal, gross 24 66 Result on discontinued operations, net of taxes 24 66 Cash used for acquisitions / received from disposals: Total purchase consideration / Proceeds from sale (233) 200 (447) 181 Less: Cash and cash equivalents acquired / divested 7 (6) Cash used for acquisitions / received from disposals (233) 200 (440) 175 GENERAL NOTES 120 Ageas Annual Report 2021 Acquisitions and disposals 120 | 240 The following significant acquisitions and disposals were made in 2021 and 2020. Details of acquisitions and disposals, if any, which took place after the date of the statement of financial position, are included in note 44 Events after the date of the statement of financial position. 3.1 Acquisitions in 2021 AgeSA (formerly: AvivaSA) (CEU) On 5 May 2021, Ageas announced that it had obtained all regulatory approvals and completed its acquisition from Aviva plc, a 40% stake in the Turkish listed life insurance and pensions company AgeSA. The cash consideration amounted to GBP 119 million (EUR 143 million including transaction costs). AgeSA is accounted for using the equity method. AG Insurance (Belgium) In 2021, AG Insurance increased its interest in CCN (Centre de Communication Nord, mixed redevelopment project in Brussels) from 5% to 50%. This associate is still accounted for using the equity method. 3.2 Disposals in 2021 Tesco Underwriting Ltd. (TU) (UK) On 14 October 2020, Ageas announced an agreement for Tesco Bank to buy Ageas’s 50.1% stake in associate Tesco Underwriting Limited. Accordingly, the carrying amount of the associate was presented as held for sale in the 2020 financial statements. The sale was completed on 4 May 2021 for a cash consideration of GBP 112 million. The impact of the sale on the results of the first 6 months of 2021 was a profit of EUR 4.2 million. This gain is spread over across the income statement captions ‘Interest, dividend and other investment income’ and ‘Results on sales and revaluations’. AG Insurance (Belgium) In 2021, Transimmo was fully consolidated by AG Insurance and was no longer accounted for using the equity method. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 3 Acquisitions and disposals 121 | 240 3.3 Acquisitions in 2020 Taiping Reinsurance Co. Ltd. (TPRe) (Asia) On 27 November 2020, Ageas acquired a 24.99% interest in Taiping Reinsurance Company Limited (TPRe) by subscribing to a capital increase of HKD 3 billion (EUR 336 million). TPRe is a subsidiary of China Taiping Insurance Holdings (CTIH). The interest in associate TPRe is accounted for using the equity method. Additional acquisition in IFLIC (Asia) On 30 December 2020, Ageas acquired an additional 23% stake in the Indian Life insurance joint venture IDBI Federal Life Insurance Company Ltd. (IFLIC) for a consideration of INR 5.1 billion (EUR 58 million including transaction costs). With this transaction, Ageas increased its interest in IFLIC to 49% and became the largest shareholder in the joint venture it operates together with IDBI Bank and Federal Bank. Ageas continues to account for the associate using the equity method. Following the transaction IFLIC was rebranded to Ageas Federal Life Insurance Company. 3.4 Disposals in 2020 AG Insurance (Belgium) In the second quarter of 2020, a loss of control in the Sicav Equities Euro resulted in the deconsolidation of this entity, leading to a capital gain of EUR 26 million. In the third quarter of 2020, AG Insurance sold the equity associate SCI Frey Retail Fund 2 for an amount of EUR 41 million, realising a capital gain of EUR 8 million. In the last quarter of 2020, AG Insurance sold their interests in the equity associate BG1 for a total consideration of EUR 125 million, realising a capital gain of EUR 32 million. 3.5 Assets and liabilities of acquisitions and disposals The table below provides details of the assets and liabilities resulting from the acquisition or disposal of subsidiaries and/or equity accounted investments at the date of acquisition or disposal. 2021 2020 Acquisitions Disposals Acquisitions Disposals Assets and liabilities of acquisitions and disposals Cash and cash equivalents 7 (6) Financial investments 5 Investment property 34 33 Investments in associates including capital (re)payments 202 (171) 427 (141) Accrued interest and other liabilities 2 13 Non-controlling interests 1 7 Other (5) (27) Net assets acquired / Net assets disposed of 233 (176) 447 (115) Result of disposal, gross 24 66 Result on discontinued operations, net of taxes 24 66 Cash used for acquisitions / received from disposals: Total purchase consideration / Proceeds from sale (233) 200 (447) 181 Less: Cash and cash equivalents acquired / divested 7 (6) Cash used for acquisitions / received from disposals (233) 200 (440) 175 121 Ageas Annual Report 2021 122 | 240 4.1 Risk Management Objectives As a multinational insurance provider, Ageas creates value through the proper and effective management of insurance risks at an individual and overall portfolio level. Ageas’ insurance operations provide both Life and Non-life insurances and consequently face a number of risks that may affect the achievement of company objectives. Ageas only seeks to take on risks:  for which it has a good understanding.  that can be adequately assessed and managed either at the individual or at the overall portfolio level.  that are affordable (i.e. within the Ageas risk appetite).  that have an acceptable risk-reward trade-off (mindful of Ageas’ commitment to its stakeholders, to society, as well as corporate and risk culture values). The main objectives of Ageas risk management are:  Risk-taking is consistent with the strategy and within risk appetite.  Appropriate incentives are in place to promote a common understanding of our risk culture.  Appropriate, timely and correct information is available to allow appropriate strategic decision-making.  An appropriate risk governance is in place, is adequate and effective, and can be evidenced.  An appropriate Enterprise Risk Management (ERM) policy framework (including limits & minimum standards) is in place, understood and embedded in day-to-day business activities.  Risk processes are high-calibre and efficient, facilitating accurate and informative risk reporting that reinforces the decision-making process. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 4 Risk Management 123 | 240 Risk culture forms an essential part of the overall corporate culture that the Ageas Board of Directors, Management Committee and Executive Committee seek to promote and embed. Ageas’ risk culture, outlined below, stems from Ageas corporate culture. The principles of corporate culture and key components of risk culture provide guidance to actions and decisions, and reflect the mind-set and attitude expected in the company. The key elements of Ageas’ desired risk (and corporate) culture are depicted below. To help promote risk awareness and embed the risk culture values across the organisation, regular risk training (e.g. covering risk event types spanning Ageas risk taxonomy) and communications (e.g. via intranet, e-mail and other internal communication apps) are in place across the Group. 4.2 Risk Management Framework Ageas defines risk as the deviation from anticipated outcomes that may have an impact on the solvency, earnings or liquidity of Ageas, its business objectives or future opportunities. Ageas has established and implemented an Enterprise Risk Management (“ERM”) framework inspired by COSO 4 ERM and Internal Control frameworks, which encompasses key components that act as a supporting foundation of the risk management system. ERM can be defined as the process of systematically and comprehensively identifying critical risks, assessing their impact and implementing integrated strategies to provide reasonable assurance regarding the achievement of the company’s objectives. Ageas’s ERM framework (depicted in the diagram above) sets the following high-level objectives:  Defines a risk appetite to ensure that the risk of insolvency is constantly managed within acceptable levels, and that the risk profile is kept within set limits.  Influences a strong culture of risk awareness whereby managers carry out their duty to understand and be aware of the risks to their business, to manage them adequately, and report them transparently.  Ensures identification & validation, assessment & prioritisation, recording, monitoring, and management of risks which affect, or can affect, the achievement of strategic and business objectives.  Supports the decision-making process by ensuring that consistent, reliable, and timely risk information is available to decision makers.  Embeds strategic risk management into the overall decision- making process. 4 Committee of sponsoring organisations of the treadway commission. GENERAL NOTES 122 Ageas Annual Report 2021 Risk Management Note - Internal Control, Information Security and Data Management are managed as part of the ERM framework. In addition to 4A & 4B, further risk reports exist and are documented in the Ageas Enterprise Risk Management Framework. 1. RISK CULTURE 2. RISK STRATEGY, OBJECTIVES & RISK APPETITE 3. RISK GOVERNANCE, RISK TAXONOMY, ERM POLICY FRAMEWORK & MODEL FRAMEWORK 4. RISK IN EXECUTION 5. DATA, IT & INFRASTRUCTURE Risk Identiﬁcation - Identify current & emerging risks - Covers risk taxonomy Risk Monitoring & Reporting Continuous monitoring & follow up on exposure & actions 4A. Key Risk & Emerging Risk Reporting 4B. ORSA Process Risk Assessment & Prioritisation - Risk likelihood & impact - Inherent / Residual / Forecasted Risk Risk Response & Control - Mitigate, avoid, accept or transfer - Actions to ensure within risk appetite 122 | 240 4.1 Risk Management Objectives As a multinational insurance provider, Ageas creates value through the proper and effective management of insurance risks at an individual and overall portfolio level. Ageas’ insurance operations provide both Life and Non-life insurances and consequently face a number of risks that may affect the achievement of company objectives. Ageas only seeks to take on risks:  for which it has a good understanding.  that can be adequately assessed and managed either at the individual or at the overall portfolio level.  that are affordable (i.e. within the Ageas risk appetite).  that have an acceptable risk-reward trade-off (mindful of Ageas’ commitment to its stakeholders, to society, as well as corporate and risk culture values). The main objectives of Ageas risk management are:  Risk-taking is consistent with the strategy and within risk appetite.  Appropriate incentives are in place to promote a common understanding of our risk culture.  Appropriate, timely and correct information is available to allow appropriate strategic decision-making.  An appropriate risk governance is in place, is adequate and effective, and can be evidenced.  An appropriate Enterprise Risk Management (ERM) policy framework (including limits & minimum standards) is in place, understood and embedded in day-to-day business activities.  Risk processes are high-calibre and efficient, facilitating accurate and informative risk reporting that reinforces the decision-making process. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 4 Risk Management 123 | 240 Risk culture forms an essential part of the overall corporate culture that the Ageas Board of Directors, Management Committee and Executive Committee seek to promote and embed. Ageas’ risk culture, outlined below, stems from Ageas corporate culture. The principles of corporate culture and key components of risk culture provide guidance to actions and decisions, and reflect the mind-set and attitude expected in the company. The key elements of Ageas’ desired risk (and corporate) culture are depicted below. To help promote risk awareness and embed the risk culture values across the organisation, regular risk training (e.g. covering risk event types spanning Ageas risk taxonomy) and communications (e.g. via intranet, e-mail and other internal communication apps) are in place across the Group. 4.2 Risk Management Framework Ageas defines risk as the deviation from anticipated outcomes that may have an impact on the solvency, earnings or liquidity of Ageas, its business objectives or future opportunities. Ageas has established and implemented an Enterprise Risk Management (“ERM”) framework inspired by COSO 4 ERM and Internal Control frameworks, which encompasses key components that act as a supporting foundation of the risk management system. ERM can be defined as the process of systematically and comprehensively identifying critical risks, assessing their impact and implementing integrated strategies to provide reasonable assurance regarding the achievement of the company’s objectives. Ageas’s ERM framework (depicted in the diagram above) sets the following high-level objectives:  Defines a risk appetite to ensure that the risk of insolvency is constantly managed within acceptable levels, and that the risk profile is kept within set limits.  Influences a strong culture of risk awareness whereby managers carry out their duty to understand and be aware of the risks to their business, to manage them adequately, and report them transparently.  Ensures identification & validation, assessment & prioritisation, recording, monitoring, and management of risks which affect, or can affect, the achievement of strategic and business objectives.  Supports the decision-making process by ensuring that consistent, reliable, and timely risk information is available to decision makers.  Embeds strategic risk management into the overall decision- making process. 4 Committee of sponsoring organisations of the treadway commission. 123 Ageas Annual Report 2021 OUR RISK CULTURE VALUES OUR CORPORATE VALUES We always act ethically and with integrity We share responsibility for maintaining our culture of risk awareness at all levels We promote an environment of open communication and eective challenge in which decision-making processes encourage taking a broad range of views and promote engagement We understand both the good (upside risk) and the harm (downside risk) that can arise from the decisions we make We take ownership and individual accountability, making timely decisions and openly reporting on the risks we take We have the right people proﬁles, incentives, reward, and remuneration structure consistent with our desired risk culture WE CARE - showing respect & helping hose around us, and staying true to who we are WE DARE - pushing boundaries and not being afraid to take a chance WE DELIVER - making things happen, keeping the promisses we make WE SHARE - learning together, inspiring others, and sharing success with all stakeholders 124 | 240 4.3 Risk Management organisation and governance A strong and effective risk governance framework, underpinned by a sound risk culture, is critical to the overall effectiveness of Ageas’s risk management arrangements. The Board is ultimately responsible for the overall Risk Management. It is assisted in the discharge of its duties by several key governance bodies as depicted below and explained further in this section (responsibilities related to risk management and internal control are explained in this section – please refer to note “A.5 Corporate Governance Statement” of this Annual Report for governance details related to Board level committees, Executive Committee, and Management Committee). 125 | 240 The following bodies provide advice – ultimately to the Executive Committee and/or the Board, unless they have been explicitly mandated by Executive Committee and/or Board to take decisions on specific tasks. Ageas Investment Committee Ageas Investment Committee (AGICO) advises the Executive Committee and monitors overall asset exposures to ensure that they are managed in accordance with the risk framework and within agreed limits. It advises management on decisions regarding investments. Its role also includes making recommendations relating to the Strategic Asset Allocation and Asset & Liability management and aims to optimise the overall investment strategy of the Group and ensures that risk mitigation actions are taken when necessary. This committee is split into an Asian part and a European part to ensure relevant regional focus. Ageas Risk Committee (ARC) Ageas Risk Committee (ARC) advises the Executive Committee on all risk related topics ensuring that all risks that affect the achievement of strategic, operational and financial objectives are promptly identified, measured, managed, reported and monitored (through adequate risk appetite limits) and that adequate risk management governance and organisations are in place and followed (as stipulated in the context of the ERM Framework). The Group, regional and local Chief Risk Officers and Chief Financial Officers from the regions are members of the ARC, which ensures that decisions or recommendations made by the ARC take into account the views and expertise of the operations. The most significant risk issues and methodologies are also reviewed and decided upon by the Executive Committee and by the Board. The ARC is itself advised by the Ageas Risk Forum on topics related to the risk management framework and by the Ageas Model Control Board that makes sure the models used are appropriate and suited to the task they are used for. Ageas Risk Forum (ARF) Ageas Risk Forum (ARF) advises the Ageas Risk Committee on topics related to the enterprise risk management framework. Group, regional and local Risk Officers are members of the ARF, ensuring knowledge and best practice sharing to further develop and continuously improve the Group’s ERM framework. The ARF itself is advised by Risk-Specific Technical Committees where appropriate. Ageas Model Control Board (MCB) Ageas Model Control Board (MCB) advises the Ageas Risk Committee on topics related to the models and methodology. The MCB is composed of Group Risk Model Managers, regional and local representatives, allowing for the proper interactions with the local Model Control Boards. The MCB ensures that the models used are appropriate and suited to the task they are used for. The MCB is itself advised by Risk-Specific Technical Committees where appropriate. A dedicated Model Control Board is organised for model-related topics specific to ageas SA/NV, focussing on holding specific activities and reinsurance. Risk-specific technical committees Risk-specific technical committees, such as the Ageas Financial Risk Technical Committee, Ageas Life Technical Committee, Ageas Non-life Technical Committee and Ageas Operational Risk Technical Committee act as technical expert bodies. They assure consistency of methodology and modelling approaches across Ageas’s local operating companies. They facilitate the collection of business requirements and align Ageas Group platforms supporting the relevant risk assessments with business requirements and overall regulatory requirements. They act as advisory bodies to the ARF and MCB. Group Risk Function The Group Risk Function - headed by the Group Chief Risk Officer (CRO) - is responsible for monitoring and reporting on the overall risk profile of the Group including the aggregate risk profile of the insurance companies. It develops, proposes and implements the ERM framework that it documents through regularly updated ERM policies. It ensures the appropriateness of the overall model governance taking into account remarks made by Ageas’s independent Model Validation team. It also coordinates major risk related projects. Group Risk (also being part of the Sustainability Network) follows the topic of sustainability, and monitors developments - such as European Commission action plans, EIOPA (European Insurance and Occupational Pensions Authority) opinions, Regulatory statements and changes in regulation - and prepares appropriate actions. Information Security is part of the ERM framework – the Executive Committee (ExCo) is ultimately accountable for the information security policy and the design, implementation and correct operation of the related controls. The ExCo assigns day-to-day responsibility for these arrangements to the Group Chief Information Security Officer (CISO) who reports to Senior Management within the Group Risk organisation. The Group (and local) CISOs develop and maintain the information security strategy and policy that supports information security governance framework, and coordinate information security across the organisation. Group (and local) CISOs oversee information security programmes and related initiatives, and at least twice per year report on information security related risks and level of maturity to appropriate Steering / Risk Committees, Executive Management and Board of Directors. GENERAL NOTES 124 Ageas Annual Report 2021 Local DPO REGIONAL & OPCO LEVEL 3 GROUP LEVEL 2 BOARD OF DIRECTORS LEVEL 1 Local Compliance Local Audit BOARD OF DIRECTORS RISK & CAPITAL COMMITTEE Executive Committee (CEO, CFO, CRO, MDA & MDE) Management Committee AUDIT COMMITTEE Ageas Investment Committee Ageas Risk Committee Group Risk Function Group CISO Group Actuarial Function Validation Group DPO Group Compliance Group Audit Risk speciﬁc Technical committees Model Control Board Ageas Risk Forum Business Management Level 1 Risk Taking Level 2 Risk / Compliance Control Level 3 Assurance Audit, Risk and Asset-Liability Management Committees Risk Management Network (incl. Regional Risk Coordinators, Local Operating Company Risk Oicers & CISOs) Local Actuarial Function * Local CISOs have a functional reporting line to local risk management 124 | 240 4.3 Risk Management organisation and governance A strong and effective risk governance framework, underpinned by a sound risk culture, is critical to the overall effectiveness of Ageas’s risk management arrangements. The Board is ultimately responsible for the overall Risk Management. It is assisted in the discharge of its duties by several key governance bodies as depicted below and explained further in this section (responsibilities related to risk management and internal control are explained in this section – please refer to note “A.5 Corporate Governance Statement” of this Annual Report for governance details related to Board level committees, Executive Committee, and Management Committee). 125 | 240 The following bodies provide advice – ultimately to the Executive Committee and/or the Board, unless they have been explicitly mandated by Executive Committee and/or Board to take decisions on specific tasks. Ageas Investment Committee Ageas Investment Committee (AGICO) advises the Executive Committee and monitors overall asset exposures to ensure that they are managed in accordance with the risk framework and within agreed limits. It advises management on decisions regarding investments. Its role also includes making recommendations relating to the Strategic Asset Allocation and Asset & Liability management and aims to optimise the overall investment strategy of the Group and ensures that risk mitigation actions are taken when necessary. This committee is split into an Asian part and a European part to ensure relevant regional focus. Ageas Risk Committee (ARC) Ageas Risk Committee (ARC) advises the Executive Committee on all risk related topics ensuring that all risks that affect the achievement of strategic, operational and financial objectives are promptly identified, measured, managed, reported and monitored (through adequate risk appetite limits) and that adequate risk management governance and organisations are in place and followed (as stipulated in the context of the ERM Framework). The Group, regional and local Chief Risk Officers and Chief Financial Officers from the regions are members of the ARC, which ensures that decisions or recommendations made by the ARC take into account the views and expertise of the operations. The most significant risk issues and methodologies are also reviewed and decided upon by the Executive Committee and by the Board. The ARC is itself advised by the Ageas Risk Forum on topics related to the risk management framework and by the Ageas Model Control Board that makes sure the models used are appropriate and suited to the task they are used for. Ageas Risk Forum (ARF) Ageas Risk Forum (ARF) advises the Ageas Risk Committee on topics related to the enterprise risk management framework. Group, regional and local Risk Officers are members of the ARF, ensuring knowledge and best practice sharing to further develop and continuously improve the Group’s ERM framework. The ARF itself is advised by Risk-Specific Technical Committees where appropriate. Ageas Model Control Board (MCB) Ageas Model Control Board (MCB) advises the Ageas Risk Committee on topics related to the models and methodology. The MCB is composed of Group Risk Model Managers, regional and local representatives, allowing for the proper interactions with the local Model Control Boards. The MCB ensures that the models used are appropriate and suited to the task they are used for. The MCB is itself advised by Risk-Specific Technical Committees where appropriate. A dedicated Model Control Board is organised for model-related topics specific to ageas SA/NV, focussing on holding specific activities and reinsurance. Risk-specific technical committees Risk-specific technical committees, such as the Ageas Financial Risk Technical Committee, Ageas Life Technical Committee, Ageas Non-life Technical Committee and Ageas Operational Risk Technical Committee act as technical expert bodies. They assure consistency of methodology and modelling approaches across Ageas’s local operating companies. They facilitate the collection of business requirements and align Ageas Group platforms supporting the relevant risk assessments with business requirements and overall regulatory requirements. They act as advisory bodies to the ARF and MCB. Group Risk Function The Group Risk Function - headed by the Group Chief Risk Officer (CRO) - is responsible for monitoring and reporting on the overall risk profile of the Group including the aggregate risk profile of the insurance companies. It develops, proposes and implements the ERM framework that it documents through regularly updated ERM policies. It ensures the appropriateness of the overall model governance taking into account remarks made by Ageas’s independent Model Validation team. It also coordinates major risk related projects. Group Risk (also being part of the Sustainability Network) follows the topic of sustainability, and monitors developments - such as European Commission action plans, EIOPA (European Insurance and Occupational Pensions Authority) opinions, Regulatory statements and changes in regulation - and prepares appropriate actions. Information Security is part of the ERM framework – the Executive Committee (ExCo) is ultimately accountable for the information security policy and the design, implementation and correct operation of the related controls. The ExCo assigns day-to-day responsibility for these arrangements to the Group Chief Information Security Officer (CISO) who reports to Senior Management within the Group Risk organisation. The Group (and local) CISOs develop and maintain the information security strategy and policy that supports information security governance framework, and coordinate information security across the organisation. Group (and local) CISOs oversee information security programmes and related initiatives, and at least twice per year report on information security related risks and level of maturity to appropriate Steering / Risk Committees, Executive Management and Board of Directors. 125 Ageas Annual Report 2021 126 | 240 Group Data Protection Function The Data Protection Officer (DPO) is an independent function that provides adequate support to the management team with regard to their accountability for ensuring compliance with GDPR. The DPO monitors compliance with GDPR and any relevant data protection laws and regulations (including Ageas internal policies) through appropriate management structures and controls, and performs analysis of security, privacy and data protection risks; The results of these analyses are reported to the Board of Directors on at least a yearly basis. The DPO escalates issues to the local Data Protection Authority (DPA) when it is clear that the entity will start processing personal data that could cause damage and/or distress to the data subjects. The DPO also organises educational programmes to staff making sure that accountabilities and responsibilities within the entity are understood. Group Actuarial Function An independent function directly reporting to the CRO to facilitate the collaboration with the Risk Management System. The main role of the Actuarial function is to issue Actuarial Opinions on three key subjects (Technical Provisions, Underwriting and Reinsurance), and additionally, coordinates the calculation of technical provisions and assures a level of consistency throughout the Group. Group Compliance Function An independent control function within Ageas that aims to provide reasonable assurance that the company and its employees comply with laws, regulations, internal rules and ethical standards. Group Internal Audit Function The internal audit function contributes to the achievement of Ageas’ objectives by providing professional and independent assurance on the effectiveness of governance, risk management and control processes. If and when appropriate, Audit formulates recommendations to optimize these processes. Local Operating Companies (OpCos) Each OpCo is responsible for ensuring that it has a comprehensive risk management framework in place, and for managing its risks within the limits, policies and guidelines set by Regulators, Ageas Group and its local Board of Directors. Furthermore, each OpCo is required to have the following in place:  a Board level Risk Committee and Audit Committee to assist the Board in fulfilling its supervision.  a Management Risk Committee, which supports its management team in ensuring that key risks are well understood, and appropriate risk management procedures are in place.  an ALM Committee whose role includes the monitoring of market risks to ensure they are managed in accordance with the risk framework and within agreed limits and to make specific decisions or recommendations relating to ALM.  a local Model Control Board which coordinates with the Ageas MCB.  a Risk Function (or Risk Officer) to support the work of the Risk Committee and to provide risk reporting and opinions to the local CEO, local Board and to Group management.  an Actuarial Function in line with Solvency II regulatory requirements.  a Compliance Function that advises the administrative or management body on compliance with laws, regulations and administrative requirements and Group and local policies where these set additional requirements. Compliance assesses the possible impact of any changes in the legal environment on the operations of the undertaking concerned and identifies any compliance risk.  a Chief Information Security Officer (CISO) supports local Senior Management.  a Data Protection Officer (DPO) that reports to the highest local management level and is contact person for the local DPA.  an Internal Audit Function assessing the adequacy and effectiveness of the internal control system and other elements of the risk governance system. 127 | 240 4.3.1 Three Lines of Defence Ageas has implemented a 3 lines of defence model - the three lines share the ultimate aim of helping the organisation to achieve its objectives while effectively managing risk. GENERAL NOTES 126 Ageas Annual Report 2021 126 | 240 Group Data Protection Function The Data Protection Officer (DPO) is an independent function that provides adequate support to the management team with regard to their accountability for ensuring compliance with GDPR. The DPO monitors compliance with GDPR and any relevant data protection laws and regulations (including Ageas internal policies) through appropriate management structures and controls, and performs analysis of security, privacy and data protection risks; The results of these analyses are reported to the Board of Directors on at least a yearly basis. The DPO escalates issues to the local Data Protection Authority (DPA) when it is clear that the entity will start processing personal data that could cause damage and/or distress to the data subjects. The DPO also organises educational programmes to staff making sure that accountabilities and responsibilities within the entity are understood. Group Actuarial Function An independent function directly reporting to the CRO to facilitate the collaboration with the Risk Management System. The main role of the Actuarial function is to issue Actuarial Opinions on three key subjects (Technical Provisions, Underwriting and Reinsurance), and additionally, coordinates the calculation of technical provisions and assures a level of consistency throughout the Group. Group Compliance Function An independent control function within Ageas that aims to provide reasonable assurance that the company and its employees comply with laws, regulations, internal rules and ethical standards. Group Internal Audit Function The internal audit function contributes to the achievement of Ageas’ objectives by providing professional and independent assurance on the effectiveness of governance, risk management and control processes. If and when appropriate, Audit formulates recommendations to optimize these processes. Local Operating Companies (OpCos) Each OpCo is responsible for ensuring that it has a comprehensive risk management framework in place, and for managing its risks within the limits, policies and guidelines set by Regulators, Ageas Group and its local Board of Directors. Furthermore, each OpCo is required to have the following in place:  a Board level Risk Committee and Audit Committee to assist the Board in fulfilling its supervision.  a Management Risk Committee, which supports its management team in ensuring that key risks are well understood, and appropriate risk management procedures are in place.  an ALM Committee whose role includes the monitoring of market risks to ensure they are managed in accordance with the risk framework and within agreed limits and to make specific decisions or recommendations relating to ALM.  a local Model Control Board which coordinates with the Ageas MCB.  a Risk Function (or Risk Officer) to support the work of the Risk Committee and to provide risk reporting and opinions to the local CEO, local Board and to Group management.  an Actuarial Function in line with Solvency II regulatory requirements.  a Compliance Function that advises the administrative or management body on compliance with laws, regulations and administrative requirements and Group and local policies where these set additional requirements. Compliance assesses the possible impact of any changes in the legal environment on the operations of the undertaking concerned and identifies any compliance risk.  a Chief Information Security Officer (CISO) supports local Senior Management.  a Data Protection Officer (DPO) that reports to the highest local management level and is contact person for the local DPA.  an Internal Audit Function assessing the adequacy and effectiveness of the internal control system and other elements of the risk governance system. 127 | 240 4.3.1 Three Lines of Defence Ageas has implemented a 3 lines of defence model - the three lines share the ultimate aim of helping the organisation to achieve its objectives while effectively managing risk. 127 Ageas Annual Report 2021 Implements the enterprise risk management framework Embeds an appropriate risk culture Identiﬁes, owns, measures and manages risks in the business, ensuring Ageas does not suer from unexpected events Implements policies and controls to manage risks (in line with Group requirements and risk appetite) and ensure that these are operating eectively on a day to day basis Identiﬁes and implements actions to manage existing and emerging risks Reports on risk management including analysing whether key business objectives are likely to be achieved Demonstrate to the Board of Directors and Regulator that risk controls are adequate and eective Operating in line with regulations Provides a reasonable level of independent assurance to Senior Management and Board of Directors on the adequacy & eectiveness of governance, risk management and controls Advises Senior Management and the Board of Directors on the setting of high level strategies and risk appetite aggregation Establishes and maintains the enterprise risk management framework Facilitates, assesses and monitors the eective operation of the risk management system Provides risk education and training Acts as an independent risk advisor Oversight & challenge of key risks and how they are measured and managed Monitors adherence with risk appetite and policies Oversees eective use of risk processes and controls Monitors compliance with regulations and informs business of requirements THIRD LINE OF DEFENCE (Internal Audit) FIRST LINE OF DEFENCE (Business Owner) SECOND LINE OF DEFENCE (Risk Management, Compliance, DPO, CISO and Actuarial Functions) 128 | 240 4.4 Capital Management Objectives Capital is a scarce and strategic resource, which requires a clearly defined, rigorous and disciplined management approach in order to ensure efficient and effective deployment. The Capital Management approach that Ageas follows aims to balance the needs and requirements of all stakeholders including shareholders, debt investors, regulators, rating agencies and customers. The main objectives of capital management at Ageas are:  to optimise the capital structure, composition and allocation of capital within Ageas;  to ensure value creation by funding profitable growth, as well as protecting the viability and profitability of the business;  to ensure optimal dividend levels, both for the Group as well as its subsidiaries. 4.4.1 Capital Management Framework Ageas’s objectives with respect to capital management are to be achieved by adhering to clearly defined processes. These are governed by clearly defined policies and procedures to ensure that capital management practices throughout the Group and the OpCos are understood, documented and monitored (with corrective actions taken if necessary). The Capital Management Framework at Ageas defines rules and principles in respect of the following:  Capital planning, i.e. defining the capital level the Group wants to hold, which is a function of: - Legal requirements and anticipated changes; - Regulatory requirements and anticipated changes; - Growth ambitions and future capital commitments; - The Risk Appetite Policy.  Capital allocation, i.e. determining the capital use that Ageas foresees, which is a function of: - Optimisation of risk reward; - The Dividend Policy (and future capital raising);  Capital structuring, i.e. maintaining an efficient balance between equity and debt;  Capital Management governance, i.e. setting clear roles and responsibilities on people and decisional bodies involved in Capital Management Processes. 4.5 Assessing Solvency & Capital 4.5.1 Measuring capital adequacy Under Solvency II, Ageas uses a Partial Internal Model (PIM) to measure its Solvency Capital Requirement under Pillar 1. The PIM combines the Solvency II Standard Formula with the Internal Model for Non-life Underwriting Risk for the main entities engaging in Non-life business. Ageas supplements the Pillar I PIM with its own internal view to measure its Solvency Capital Requirements (called SCR ageas ) under Pillar 2. On top of the Partial Internal Model Non-life, the SCR ageas enhances the Standard Formula with the following elements:  Reviewed spread risk treatment;  Inclusion of fundamental spread for EU sovereign (& equivalent) exposures;  Exclusion of non-fundamental spread on other debt;  Internal model for Real Estate;  Exclusion of transitional measures. This SCR ageas is then compared with qualifying own funds to determine the Group’s overall capital adequacy, providing the Solvency II ageas ratio. For more information on Solvency II, please see also note 5 Regulatory supervision and solvency. Overall capital adequacy is verified on a Group-wide basis, quarterly and annually:  Through a quarterly Solvency and Capital report, Ageas’s Board of Directors ensures that capital adequacy continues to be met on a current basis;  Ageas’s Board also proactively assesses and steers the Group’s capital adequacy on a multi-year basis, taking into account strategy and forecasted business and risk assumptions. This is done through a process called Own Risk & Solvency Assessment, which is embedded into Ageas’s multi-year budgeting and planning process. 4.5.2 Risk Appetite Framework The Risk Appetite Framework consists of criteria which are used to formulate the willingness of management to take on risk in a specific area. Ageas’s Risk Appetite Framework applies to all OpCos of Ageas (defined as entities of which Ageas, directly or indirectly is a shareholder, and holds operational control), and on a best effort basis to affiliates (defined as entities of which Ageas, directly or indirectly is a shareholder, but does not hold operational control). The main objectives of the risk appetite framework are to ensure that:  The exposure to a number of key risks of each OpCo and the Group as a whole remain within known, acceptable and controlled levels;  Risk Appetite criteria are clearly defined, so that actual exposures and activities can be compared to the criteria agreed at Board level, allowing monitoring and positive confirmation that risks are controlled and that the Board is able and willing to accept these exposures;  Risks limits are linked to the actual risk taking capacity of an OpCo and Group in a transparent and straightforward way. 129 | 240 Due to their importance for the continued operation of Ageas, and its ability to adhere to its commitments to its stakeholders, the following criteria are set:  Solvency - Risk Consumption (RC, being the level of buffer capital consumed by the current risk profile, consistent with a 1 in 30 year loss) remains below the Risk Appetite (RA) budget, set at 40% of Own Funds, net of expected dividends. - Capital Consumption (CC) remains below the Target Capital (TC), set at 175% of SCR ageas .  Earnings - The deviation from year-end budgeted IFRS earnings due to a combined 1/10 financial loss event is limited to 100%. - With the following early warning mechanism: The deviation from year end forecasted IFRS earnings (or budgeted IFRS earnings should the forecast be lower than the budget) due to a combined 1/10 financial loss event is limited to 100%.  Liquidity - The base liquidity ratio is at least 100%. - The stressed liquidity ratio is at least 100%. 4.6 Risk taxonomy In order to ensure a consistent and comprehensive approach to risk identification, Ageas has defined a risk taxonomy encompassing the key risks that can impact the Group. The risk taxonomy (below) is aligned with Solvency II risk categories, which facilitates the alignment of internal and external reporting. GENERAL NOTES 128 Ageas Annual Report 2021 128 | 240 4.4 Capital Management Objectives Capital is a scarce and strategic resource, which requires a clearly defined, rigorous and disciplined management approach in order to ensure efficient and effective deployment. The Capital Management approach that Ageas follows aims to balance the needs and requirements of all stakeholders including shareholders, debt investors, regulators, rating agencies and customers. The main objectives of capital management at Ageas are:  to optimise the capital structure, composition and allocation of capital within Ageas;  to ensure value creation by funding profitable growth, as well as protecting the viability and profitability of the business;  to ensure optimal dividend levels, both for the Group as well as its subsidiaries. 4.4.1 Capital Management Framework Ageas’s objectives with respect to capital management are to be achieved by adhering to clearly defined processes. These are governed by clearly defined policies and procedures to ensure that capital management practices throughout the Group and the OpCos are understood, documented and monitored (with corrective actions taken if necessary). The Capital Management Framework at Ageas defines rules and principles in respect of the following:  Capital planning, i.e. defining the capital level the Group wants to hold, which is a function of: - Legal requirements and anticipated changes; - Regulatory requirements and anticipated changes; - Growth ambitions and future capital commitments; - The Risk Appetite Policy.  Capital allocation, i.e. determining the capital use that Ageas foresees, which is a function of: - Optimisation of risk reward; - The Dividend Policy (and future capital raising);  Capital structuring, i.e. maintaining an efficient balance between equity and debt;  Capital Management governance, i.e. setting clear roles and responsibilities on people and decisional bodies involved in Capital Management Processes. 4.5 Assessing Solvency & Capital 4.5.1 Measuring capital adequacy Under Solvency II, Ageas uses a Partial Internal Model (PIM) to measure its Solvency Capital Requirement under Pillar 1. The PIM combines the Solvency II Standard Formula with the Internal Model for Non-life Underwriting Risk for the main entities engaging in Non-life business. Ageas supplements the Pillar I PIM with its own internal view to measure its Solvency Capital Requirements (called SCR ageas ) under Pillar 2. On top of the Partial Internal Model Non-life, the SCR ageas enhances the Standard Formula with the following elements:  Reviewed spread risk treatment;  Inclusion of fundamental spread for EU sovereign (& equivalent) exposures;  Exclusion of non-fundamental spread on other debt;  Internal model for Real Estate;  Exclusion of transitional measures. This SCR ageas is then compared with qualifying own funds to determine the Group’s overall capital adequacy, providing the Solvency II ageas ratio. For more information on Solvency II, please see also note 5 Regulatory supervision and solvency. Overall capital adequacy is verified on a Group-wide basis, quarterly and annually:  Through a quarterly Solvency and Capital report, Ageas’s Board of Directors ensures that capital adequacy continues to be met on a current basis;  Ageas’s Board also proactively assesses and steers the Group’s capital adequacy on a multi-year basis, taking into account strategy and forecasted business and risk assumptions. This is done through a process called Own Risk & Solvency Assessment, which is embedded into Ageas’s multi-year budgeting and planning process. 4.5.2 Risk Appetite Framework The Risk Appetite Framework consists of criteria which are used to formulate the willingness of management to take on risk in a specific area. Ageas’s Risk Appetite Framework applies to all OpCos of Ageas (defined as entities of which Ageas, directly or indirectly is a shareholder, and holds operational control), and on a best effort basis to affiliates (defined as entities of which Ageas, directly or indirectly is a shareholder, but does not hold operational control). The main objectives of the risk appetite framework are to ensure that:  The exposure to a number of key risks of each OpCo and the Group as a whole remain within known, acceptable and controlled levels;  Risk Appetite criteria are clearly defined, so that actual exposures and activities can be compared to the criteria agreed at Board level, allowing monitoring and positive confirmation that risks are controlled and that the Board is able and willing to accept these exposures;  Risks limits are linked to the actual risk taking capacity of an OpCo and Group in a transparent and straightforward way. 129 | 240 Due to their importance for the continued operation of Ageas, and its ability to adhere to its commitments to its stakeholders, the following criteria are set:  Solvency - Risk Consumption (RC, being the level of buffer capital consumed by the current risk profile, consistent with a 1 in 30 year loss) remains below the Risk Appetite (RA) budget, set at 40% of Own Funds, net of expected dividends. - Capital Consumption (CC) remains below the Target Capital (TC), set at 175% of SCR ageas .  Earnings - The deviation from year-end budgeted IFRS earnings due to a combined 1/10 financial loss event is limited to 100%. - With the following early warning mechanism: The deviation from year end forecasted IFRS earnings (or budgeted IFRS earnings should the forecast be lower than the budget) due to a combined 1/10 financial loss event is limited to 100%.  Liquidity - The base liquidity ratio is at least 100%. - The stressed liquidity ratio is at least 100%. 4.6 Risk taxonomy In order to ensure a consistent and comprehensive approach to risk identification, Ageas has defined a risk taxonomy encompassing the key risks that can impact the Group. The risk taxonomy (below) is aligned with Solvency II risk categories, which facilitates the alignment of internal and external reporting. 129 Ageas Annual Report 2021 TOTAL RISK RISK TAXONOMY FINANCIAL RISKS INSURANCE RISKS OPERATIONAL RISKS STRATEGIC & BUSINESS RISKS Market risk Default risk Liquidity risk (assets & liabilities) Intangible assets risk Employment practices & workplace safety Execution, delivery & process management Technology Internal fraud External fraud Damage to physical assets (incl. physical security) Clients, products, business & legal practices Conduct Regulatory compliance Third party Statutory reporting, disclosure & tax Business continuity, crisis management & operational resilience Data management Information Security (incl. cyber) Model Strategic risk Change risk Industry risk Systemic risk Sustainability risk Life risk Non-life risk Health risk 130 | 240 The risk in execution cycle (depicted in the ERM framework visual – section 4.1) and the Risk taxonomy are fundamental to our Key Risk Reporting (KRR) and Emerging Risk Reporting (ERR) processes. 4.6.1 Key Risk Reporting (KRR) KRR consists of a systematic approach to identify and mitigate key (existing) risks that threaten the realisation of Ageas’ business and strategic objectives. The process considers all types of risks in our risk taxonomy to identify key risks, analyses risk causes and deploys appropriate risk response strategies. During this process, identified risks are assessed and managed using Ageas’ risk rating methodology. Likelihood and impact criteria (financial and non-financial) are used to determine a level of concern, which guides when actions need to be taken. Each region (set of OpCos and/or Joint Ventures with common regional oversight) and/or OpCo re-evaluates key risks on at least a quarterly basis, and the most significant risks are also monitored and reported on at Group level. The key outputs of the process are documented in a quarterly Group Top Risk Report. The top key risks that Ageas faced during 2021 are:  Volatile / unfavourable market movements (including impacts due to the COVID-19 pandemic).  Interest Rate Risk: prolonged low interest rate / sudden rise of interest rate combined with mass lapses.  Higher Inflation Risk.  Information Security Risk (including cyber and data protection). Volatile / unfavourable market movements (including impacts due to the COVID-19 pandemic) The COVID-19 pandemic and its uncertain recovery path (including inflation trajectory and supply-chain issues) has increased volatile / unfavourable market movements. Following the unprecedented and massive interventions taken from Central Banks and Governments to help stabilise some of the economic and financial consequences triggered by the pandemic, support measures are starting to be wound down. Consequences from increased deficits and debts are highly difficult to anticipate and measure. The evolution of COVID-19 and its impacts have been closely monitored and assessed throughout 2021 and Ageas entities have demonstrated both financial and operational resilience amidst the unsettling circumstances caused by the pandemic. Interest Rate Risk: prolonged low interest rate / sudden rise of Interest rate combined with mass lapses. Central banks in advanced economies may keep interest rates low as governments struggle to manage their higher debt loads. Some are likely to tolerate higher inflation in future to achieve this aim. The biggest risk is a sudden increase in inflation without an increase in nominal interest rates (decreasing real interest rates). Despite the increase observed over the first three quarters of 2021, interest rates remain at historically low/negative levels among others suffering from the downside pressure induced by the Covid-19 situation and the related monetary policies which further challenges the equilibria on which the Life Insurance business model is based. These economic uncertainties give rise to the risk of potential losses from spread movements, equity market corrections, counterparty default and downgrades on the investment portfolio and potential broker and customer debt default. Ageas has implemented actions to mitigate exposure to this risk. Higher Inflation Risk Major economies are currently experiencing inflation rates far above Central Bank targets. The debate is ongoing on whether this is a transitory rise triggered by supply-chain issues at the reopening of the global economy, or a more long-term effect. The general increase in inflation is partially a consequence of the economic recovery observed lately, which has to adjust to the (probably temporary) bottlenecks in the production and transport processes during the lockdown periods. In parallel, other factors are clearly playing a role in this phenomenon, such as the energy price crisis – while in the past energy prices often fell at relatively the same pace as they rose, factors such as the Paris climate agreement, European Green Deal, Geo- Political tension (e.g. Ukraine-Russia, USA…), differing energy policies adopted by different states… could imply that fossil fuel prices will stay elevated and possibly continue to rise. A sudden increase in inflation (resulting from post-Covid economic recovery) not immediately followed by an increase in the nominal interest rates (decreasing real interest rates) is considered to be an additional risk for insurers. A stress test was conducted for the 2021 ORSA. Information Security (including cyber and data protection) As global focus remains on the pandemic, cybercriminals continue their efforts to exploit the situation. Due to the COVID-19 situation, the majority of staff across our operating companies and JVs are working from home, which can increase our vulnerability to information security risk (including cyber risk). Whilst cybercrime activities / threats are heightened, no major successful cyber-attacks are reported across Ageas entities – education, vigilance and awareness of all staff is key to combatting cyber threats so naturally significant time and effort is spent on ensuring personnel are aware of the latest approaches that malicious actors may use. 131 | 240 Cyber security risks are mitigated by implementing and embedding the Group Information Security framework, which is part of the broader Enterprise Risk Management framework. Furthermore, a Group Information Security Community is established and chaired by the Group Chief Information Security Officer (CISO). This Community serves as a platform for the exchange of information and best practices regarding Information Security within Ageas Group operating companies, as well as the identification of synergies and common initiatives regarding Information Security. A Security Operating Centre is established to facilitate a 24/7 overview of Ageas’ critical infrastructure and enables security teams to respond immediately to any identified security threats – including cyber-attacks – which may have a critical impact on Ageas’ business. Additionally, specific Ageas Group training programs on data and information security (in addition to continuous awareness and education initiatives) are in place to further strengthen Ageas’ operational resilience. A yearly information security assessment is performed based on the Information Security Forum Security HealthCheck (ISF SHC) 5 . The insurance worldwide result is used as a benchmark. The results of this assessment are reviewed and confirmed by an independent third-party. Each local Ageas entity agrees and defines local actions based on the results of this yearly assessment. Progress of these actions is monitored within the Information Security Community. 4.6.2 Emerging Risk Reporting (including sustainability risks) Ageas has also implemented an Emerging Risk Process. This is a risk identification exercise to determine possible threats / risks that stem from emerging trends / opportunities for the business that, by their nature, are uncertain and difficult to quantify. An Horizon Scan process led by Group Strategy occurs annually with stakeholders from across Group entities that make up a Think2030 working group, a forward looking strategically focused group. Identified emerging trends are then scored based on artificial intelligence, and the opinion of Ageas’ employees. All these components support in building the Horizon Scan radar to define focus and priorities in Horizon Scan report. The Horizon Scan report, Regional / OpCo emerging risk radars and reports together with numerous external sources (insurance industry reports, forums, peer reports…) provide key inputs into the Emerging Risk Reporting Process. Business relevant emerging risks are categorised using PESTLE methodology (Political, Economic, Social, Technological, Legal, Environmental), are assessed and managed using Ageas’ emerging risk rating methodology where proximity and impact criteria are used to guide the most appropriate course of action. Regions / OpCos compile local emerging risk reports on an annual basis which feed into a Group Emerging Risk Report. The annual Group Emerging Risk Report is presented at risk governing bodies including the Board of Directors. Actions and emerging risk evolutions are then followed up on a quarterly basis within the Group Top Risk Report. The top (high proximity, major impact) Emerging Risks for Ageas as at end 2021 are:  Cybercrime  Future of work  Societal sustainability and ethical way of doing business  Environmental sustainability (climate change / extreme weather) It should be noted that some of these emerging risks are also reported as key risks – the (currently) existing impacts of these risks are managed through the KRR process, whilst the emerging / future anticipated risk impacts are followed up through the emerging risk reporting process. Cyber Crime (PESTLE category – Technological) With the increased use of technology (Internet of Things, wearables, digitalization, cloud computing, etc.) and data becoming even more valuable, private and corporate data is subject to more cyberattacks. COVID 19 resulted in workforces across the globe working remotely from home or other locations with high reliance on computer systems, mobile devices and the internet to work. There is evidence that malicious actors are exploiting these vulnerabilities to their own advantage as cybercrime is on the rise. ‘Silent cyber risk’ is an area requiring specific focus – it includes the potential cyber-related losses stemming from traditional non-life policies that were as such not designed to cover cyber risk. To date, actual impact on the business has been minimal and the reporting of this risk reflects industry-wide evidence that malicious activity is on the increase, and the importance of regularly reviewing and evolving controls against an ever-changing threat landscape. For example, the industry and the business have seen the number of phishing scams, the sending of fraudulent messages designed to trick a human victim into revealing sensitive information to the attacker or to deploy malicious software on the victim's infrastructure, continue to rise. Please refer to the actions covered under the KRR ‘Information Security (including cyber and data protection)’. 5 ISF SHC is available in ISF Standard of Good Practice (SoGP) and/or ISO 27k formats. Global results for Ageas Group are reported in the ISF SoGP format comprising 17 chapters against which the assessment is performed. GENERAL NOTES 130 Ageas Annual Report 2021 130 | 240 The risk in execution cycle (depicted in the ERM framework visual – section 4.1) and the Risk taxonomy are fundamental to our Key Risk Reporting (KRR) and Emerging Risk Reporting (ERR) processes. 4.6.1 Key Risk Reporting (KRR) KRR consists of a systematic approach to identify and mitigate key (existing) risks that threaten the realisation of Ageas’ business and strategic objectives. The process considers all types of risks in our risk taxonomy to identify key risks, analyses risk causes and deploys appropriate risk response strategies. During this process, identified risks are assessed and managed using Ageas’ risk rating methodology. Likelihood and impact criteria (financial and non-financial) are used to determine a level of concern, which guides when actions need to be taken. Each region (set of OpCos and/or Joint Ventures with common regional oversight) and/or OpCo re-evaluates key risks on at least a quarterly basis, and the most significant risks are also monitored and reported on at Group level. The key outputs of the process are documented in a quarterly Group Top Risk Report. The top key risks that Ageas faced during 2021 are:  Volatile / unfavourable market movements (including impacts due to the COVID-19 pandemic).  Interest Rate Risk: prolonged low interest rate / sudden rise of interest rate combined with mass lapses.  Higher Inflation Risk.  Information Security Risk (including cyber and data protection). Volatile / unfavourable market movements (including impacts due to the COVID-19 pandemic) The COVID-19 pandemic and its uncertain recovery path (including inflation trajectory and supply-chain issues) has increased volatile / unfavourable market movements. Following the unprecedented and massive interventions taken from Central Banks and Governments to help stabilise some of the economic and financial consequences triggered by the pandemic, support measures are starting to be wound down. Consequences from increased deficits and debts are highly difficult to anticipate and measure. The evolution of COVID-19 and its impacts have been closely monitored and assessed throughout 2021 and Ageas entities have demonstrated both financial and operational resilience amidst the unsettling circumstances caused by the pandemic. Interest Rate Risk: prolonged low interest rate / sudden rise of Interest rate combined with mass lapses. Central banks in advanced economies may keep interest rates low as governments struggle to manage their higher debt loads. Some are likely to tolerate higher inflation in future to achieve this aim. The biggest risk is a sudden increase in inflation without an increase in nominal interest rates (decreasing real interest rates). Despite the increase observed over the first three quarters of 2021, interest rates remain at historically low/negative levels among others suffering from the downside pressure induced by the Covid-19 situation and the related monetary policies which further challenges the equilibria on which the Life Insurance business model is based. These economic uncertainties give rise to the risk of potential losses from spread movements, equity market corrections, counterparty default and downgrades on the investment portfolio and potential broker and customer debt default. Ageas has implemented actions to mitigate exposure to this risk. Higher Inflation Risk Major economies are currently experiencing inflation rates far above Central Bank targets. The debate is ongoing on whether this is a transitory rise triggered by supply-chain issues at the reopening of the global economy, or a more long-term effect. The general increase in inflation is partially a consequence of the economic recovery observed lately, which has to adjust to the (probably temporary) bottlenecks in the production and transport processes during the lockdown periods. In parallel, other factors are clearly playing a role in this phenomenon, such as the energy price crisis – while in the past energy prices often fell at relatively the same pace as they rose, factors such as the Paris climate agreement, European Green Deal, Geo- Political tension (e.g. Ukraine-Russia, USA…), differing energy policies adopted by different states… could imply that fossil fuel prices will stay elevated and possibly continue to rise. A sudden increase in inflation (resulting from post-Covid economic recovery) not immediately followed by an increase in the nominal interest rates (decreasing real interest rates) is considered to be an additional risk for insurers. A stress test was conducted for the 2021 ORSA. Information Security (including cyber and data protection) As global focus remains on the pandemic, cybercriminals continue their efforts to exploit the situation. Due to the COVID-19 situation, the majority of staff across our operating companies and JVs are working from home, which can increase our vulnerability to information security risk (including cyber risk). Whilst cybercrime activities / threats are heightened, no major successful cyber-attacks are reported across Ageas entities – education, vigilance and awareness of all staff is key to combatting cyber threats so naturally significant time and effort is spent on ensuring personnel are aware of the latest approaches that malicious actors may use. 131 | 240 Cyber security risks are mitigated by implementing and embedding the Group Information Security framework, which is part of the broader Enterprise Risk Management framework. Furthermore, a Group Information Security Community is established and chaired by the Group Chief Information Security Officer (CISO). This Community serves as a platform for the exchange of information and best practices regarding Information Security within Ageas Group operating companies, as well as the identification of synergies and common initiatives regarding Information Security. A Security Operating Centre is established to facilitate a 24/7 overview of Ageas’ critical infrastructure and enables security teams to respond immediately to any identified security threats – including cyber-attacks – which may have a critical impact on Ageas’ business. Additionally, specific Ageas Group training programs on data and information security (in addition to continuous awareness and education initiatives) are in place to further strengthen Ageas’ operational resilience. A yearly information security assessment is performed based on the Information Security Forum Security HealthCheck (ISF SHC) 5 . The insurance worldwide result is used as a benchmark. The results of this assessment are reviewed and confirmed by an independent third-party. Each local Ageas entity agrees and defines local actions based on the results of this yearly assessment. Progress of these actions is monitored within the Information Security Community. 4.6.2 Emerging Risk Reporting (including sustainability risks) Ageas has also implemented an Emerging Risk Process. This is a risk identification exercise to determine possible threats / risks that stem from emerging trends / opportunities for the business that, by their nature, are uncertain and difficult to quantify. An Horizon Scan process led by Group Strategy occurs annually with stakeholders from across Group entities that make up a Think2030 working group, a forward looking strategically focused group. Identified emerging trends are then scored based on artificial intelligence, and the opinion of Ageas’ employees. All these components support in building the Horizon Scan radar to define focus and priorities in Horizon Scan report. The Horizon Scan report, Regional / OpCo emerging risk radars and reports together with numerous external sources (insurance industry reports, forums, peer reports…) provide key inputs into the Emerging Risk Reporting Process. Business relevant emerging risks are categorised using PESTLE methodology (Political, Economic, Social, Technological, Legal, Environmental), are assessed and managed using Ageas’ emerging risk rating methodology where proximity and impact criteria are used to guide the most appropriate course of action. Regions / OpCos compile local emerging risk reports on an annual basis which feed into a Group Emerging Risk Report. The annual Group Emerging Risk Report is presented at risk governing bodies including the Board of Directors. Actions and emerging risk evolutions are then followed up on a quarterly basis within the Group Top Risk Report. The top (high proximity, major impact) Emerging Risks for Ageas as at end 2021 are:  Cybercrime  Future of work  Societal sustainability and ethical way of doing business  Environmental sustainability (climate change / extreme weather) It should be noted that some of these emerging risks are also reported as key risks – the (currently) existing impacts of these risks are managed through the KRR process, whilst the emerging / future anticipated risk impacts are followed up through the emerging risk reporting process. Cyber Crime (PESTLE category – Technological) With the increased use of technology (Internet of Things, wearables, digitalization, cloud computing, etc.) and data becoming even more valuable, private and corporate data is subject to more cyberattacks. COVID 19 resulted in workforces across the globe working remotely from home or other locations with high reliance on computer systems, mobile devices and the internet to work. There is evidence that malicious actors are exploiting these vulnerabilities to their own advantage as cybercrime is on the rise. ‘Silent cyber risk’ is an area requiring specific focus – it includes the potential cyber-related losses stemming from traditional non-life policies that were as such not designed to cover cyber risk. To date, actual impact on the business has been minimal and the reporting of this risk reflects industry-wide evidence that malicious activity is on the increase, and the importance of regularly reviewing and evolving controls against an ever-changing threat landscape. For example, the industry and the business have seen the number of phishing scams, the sending of fraudulent messages designed to trick a human victim into revealing sensitive information to the attacker or to deploy malicious software on the victim's infrastructure, continue to rise. Please refer to the actions covered under the KRR ‘Information Security (including cyber and data protection)’. 5 ISF SHC is available in ISF Standard of Good Practice (SoGP) and/or ISO 27k formats. Global results for Ageas Group are reported in the ISF SoGP format comprising 17 chapters against which the assessment is performed. 131 Ageas Annual Report 2021 132 | 240 Future of Work (PESTLE category – Social) The growing adoption of AI in the workplace, expansion of the workforce (internal & external stakeholders, such as consultants, service providers,…), remote workforce, flex working, sustainability, dependency on technology, talent attraction & retention, unemployment, social shifts…are shaping the future of work. COVID-19 has accelerated the pace at which companies are responding to and rethinking what the future of work should entail for their organisation. This contributes to an increasingly competitive market for talent attraction and retention. Factors such as sustainability and increased remote working may further result in companies downsizing or relocating office space (potential real estate portfolio impact). In the longer-term, it may be likely that people will increasingly co-work with machines & robotics – social aspects of the workplace may further deteriorate potentially leading to mental health issues, impacting overall well-being, human interactions and experiences. With stakeholder engagement, Ageas has established projects and actions to collectively define what the future of work may entail. The future of work project, new way of working project, digital workplace project, and smart automation represent the key actions underway in this area. Societal Sustainability & ethical ways of doing business (PESTLE category – Social) Social sustainability is about identifying & managing business impacts on people (from employees & customers to communities). Society is increasingly concerned about environmental and social issues, opting more towards conscious rather than conspicuous consumption. Maintaining a transparent and strong ethical way of doing business, supported by products, services, societal / environmental initiatives and actions are becoming more vital than ever to support long-term business viability and success. In the event that the business does not evidence an ethical way of doing business in a growingly complex world (technological advances, big data, AI, global sustainability/ESG, supply chains, pandemics, viruses, cybercrime…) the long term viability of the business could be materially adversely impacted from regulatory, reputational and customer retention perspectives. Ethical use of AI and Explainable AI are topics that are being prioritized in a Data Management & Governance Taskforce. Ethical & interpretable / explainable AI is being explored with respect to pricing where the exact needs of practitioners are being assessed. With respect to Sustainability, focused effort on the Sustainable Development Goals and in particular the Social element of ESG, responsible insurance, responsible investments and responsible operations is reported on in this report. With the launch of a new 3 year strategic cycle (‘Impact 24’), work is commencing on Product Innovation to achieve the target of 25% of GWP (Gross Written Premiums) coming from products stimulating our customers in the transition towards a more sustainable world by 2024 and 100% of products to be reviewed for transparency by 2024. Environmental sustainability (climate change / extreme weather) (PESTLE category – Environmental) Human activities change the earth's climate and are presently driving climate change through global warming. Extreme weather includes unexpected, unusual, unpredictable, severe, or unseasonal weather. Often, extreme events are based on a location's recorded weather history and defined as lying in the most unusual ten percent. The ability of the global insurance industry to manage society’s risks is being threatened by climate change: more frequent extreme weather events are driving up uninsured losses and making certain assets uninsurable. More natural catastrophes are expected which can impact, for example, fire & household business lines but also profitability of the sector, with disaster-related costs becoming unsustainable. Furthermore, as the physical effects of climate change are contributing to more frequent and extreme global weather events, this will in turn have a direct impact on re/insurance, whereby reinsurers are likely to change their risk appetite. As part of Ageas’ 3-year strategic cycle ‘Impact 24’, Ageas will take a long-term, responsible approach to how Ageas invests, contributing to solutions for sustainable cities, local economies and climate change. Ageas is also committed to GHG (Greenhouse gases) emission reduction - within this strategic impact area, Ageas has defined actions to reduce its environmental impact. Ageas also performed a scenario programme as part of the ORSA 2021 exercise – the approach and resulting actions are further detailed below in this section. 133 | 240 The Group Emerging Risk Radar below reflects the emerging risks most relevant to business activities that have been identified as part of the 2021 Emerging Risk Process: GENERAL NOTES 132 Ageas Annual Report 2021 132 | 240 Future of Work (PESTLE category – Social) The growing adoption of AI in the workplace, expansion of the workforce (internal & external stakeholders, such as consultants, service providers,…), remote workforce, flex working, sustainability, dependency on technology, talent attraction & retention, unemployment, social shifts…are shaping the future of work. COVID-19 has accelerated the pace at which companies are responding to and rethinking what the future of work should entail for their organisation. This contributes to an increasingly competitive market for talent attraction and retention. Factors such as sustainability and increased remote working may further result in companies downsizing or relocating office space (potential real estate portfolio impact). In the longer-term, it may be likely that people will increasingly co-work with machines & robotics – social aspects of the workplace may further deteriorate potentially leading to mental health issues, impacting overall well-being, human interactions and experiences. With stakeholder engagement, Ageas has established projects and actions to collectively define what the future of work may entail. The future of work project, new way of working project, digital workplace project, and smart automation represent the key actions underway in this area. Societal Sustainability & ethical ways of doing business (PESTLE category – Social) Social sustainability is about identifying & managing business impacts on people (from employees & customers to communities). Society is increasingly concerned about environmental and social issues, opting more towards conscious rather than conspicuous consumption. Maintaining a transparent and strong ethical way of doing business, supported by products, services, societal / environmental initiatives and actions are becoming more vital than ever to support long-term business viability and success. In the event that the business does not evidence an ethical way of doing business in a growingly complex world (technological advances, big data, AI, global sustainability/ESG, supply chains, pandemics, viruses, cybercrime…) the long term viability of the business could be materially adversely impacted from regulatory, reputational and customer retention perspectives. Ethical use of AI and Explainable AI are topics that are being prioritized in a Data Management & Governance Taskforce. Ethical & interpretable / explainable AI is being explored with respect to pricing where the exact needs of practitioners are being assessed. With respect to Sustainability, focused effort on the Sustainable Development Goals and in particular the Social element of ESG, responsible insurance, responsible investments and responsible operations is reported on in this report. With the launch of a new 3 year strategic cycle (‘Impact 24’), work is commencing on Product Innovation to achieve the target of 25% of GWP (Gross Written Premiums) coming from products stimulating our customers in the transition towards a more sustainable world by 2024 and 100% of products to be reviewed for transparency by 2024. Environmental sustainability (climate change / extreme weather) (PESTLE category – Environmental) Human activities change the earth's climate and are presently driving climate change through global warming. Extreme weather includes unexpected, unusual, unpredictable, severe, or unseasonal weather. Often, extreme events are based on a location's recorded weather history and defined as lying in the most unusual ten percent. The ability of the global insurance industry to manage society’s risks is being threatened by climate change: more frequent extreme weather events are driving up uninsured losses and making certain assets uninsurable. More natural catastrophes are expected which can impact, for example, fire & household business lines but also profitability of the sector, with disaster-related costs becoming unsustainable. Furthermore, as the physical effects of climate change are contributing to more frequent and extreme global weather events, this will in turn have a direct impact on re/insurance, whereby reinsurers are likely to change their risk appetite. As part of Ageas’ 3-year strategic cycle ‘Impact 24’, Ageas will take a long-term, responsible approach to how Ageas invests, contributing to solutions for sustainable cities, local economies and climate change. Ageas is also committed to GHG (Greenhouse gases) emission reduction - within this strategic impact area, Ageas has defined actions to reduce its environmental impact. Ageas also performed a scenario programme as part of the ORSA 2021 exercise – the approach and resulting actions are further detailed below in this section. 133 | 240 The Group Emerging Risk Radar below reflects the emerging risks most relevant to business activities that have been identified as part of the 2021 Emerging Risk Process: 133 Ageas Annual Report 2021 High Medium Low Major Act Cybercrime Future of work Pandemics & new viruses Business interruption/ supply chain disruption New insurance players & distribution Societal sustainability & ethical way of doing business Geo-political instability & Economic Uncertainty Data accessibility, availability & ethical use New customer needs & expectations Organisational transformation Robotics / AI / Big Data / Technology Act Act Analyse Aware AwareAware Analyse Analyse Moderate Minor 0-3 Years 3 to 5 Years More than 5 Years Environmental sustainability (climate change/extreme weather) Future of health Demographic change Regulation Political Economic Social Technology Legal Environmental Impact Proximity 134 | 240 Spotlight: Climate Change Risk Assessment With its new strategy Impact 24, Ageas puts sustainability and long-term thinking at the heart of the Group’s decision-making to make a positive and lasting impact for all stakeholders. In the new strategy, Ageas will strengthen the long-term, responsible approach to investment and reduce its environmental impact to become GHG-neutral in its own operations. While Management is convinced that these are critical steps to contribute to addressing the climate change challenges, Ageas strives to ensure an efficient management of the potential mid and long-term impacts of different climate change evolution and the implications for the insurance business and operations. In 2021, for the first time, to better understand and manage the short-, medium-, and long-term risks from climate change and how they will affect its business model Ageas performed climate change stress testing as part of its ORSA process. Ageas defined its approach, based on the Bank of England’s Prudential Regulation Authority (PRA) stress test approach in the Climate Biennial Exploratory Scenario (CBES). Scenario definition PRA 2021 Biennial Exploratory Scenario (BeS) served as inspiration for asset and liabilities stresses for transition and physical risks, considering type of investment and sector allocation. The impacts of the three hypothetical climate scenarios cover a 30-year time horizon on selected metrics of their business models and asset valuations:  Early Action: the transition to a net-zero emissions economy starts in 2021 so carbon taxes and other policies intensify relatively gradually over the scenario horizon leading to a drop in global carbon dioxide emissions to net-zero around 2050. Global warming is limited to 1.8°C by the end of the scenario (2050) relative to pre-industrial levels. Some sectors are more adversely affected by the transition than others, but the overall impact on GDP growth is muted, particularly in the latter half of the scenario once a significant portion of the required transition has occurred and the productivity benefits of green technology investments begin to be realized.  Late Action: the transition is delayed until 2031, at which point there is a sudden increase in the intensity of climate policy, leading to a successful reduction of greenhouse gas emissions to net-zero around 2050, but the transition required to achieve that is abrupt and therefore disorderly. Global warming is limited to 1.8°C by the end of the scenario (2050) relative to pre-industrial levels. The more compressed nature of the reduction in emissions results in material short-term macroeconomic disruption. This affects the whole economy but is particularly concentrated in carbon-intensive sectors.  The No Additional Action scenario. In this scenario, no new climate policies are introduced beyond those already implemented prior to 2021. The Bank has calibrated that scenario based on the physical risks that might be expected to materialize in the period from 2050 to 2080 if no further policy action were taken. The absence of transition policies leads to a growing concentration of greenhouse gas emissions in the atmosphere and, as a result, global temperature levels continue to increase, reaching 3.3°C relative to pre-industrial levels by the end of the scenario. This leads to chronic changes in precipitation, ecosystems and sea-level. There is also a rise in the frequency and severity of extreme weather events such as heatwaves, droughts, wildfires, tropical cyclones and flooding. There are permanent impacts on living and working conditions, buildings and infrastructure. Changes in physical hazards are unevenly distributed with tropical and subtropical regions affected more severely. Many of the impacts from physical risks are expected to become more severe later in the 21 st century and some will become irreversible. So the headwinds facing the economy would be expected to increase further into the future. The CBES scenario specification builds upon a subset of the Network for Greening the Financial System (NGFS) climate scenarios, which aim to provide central banks and supervisors with a common starting point for analyzing climate risks under different future pathways. The Bank of England has expanded on the NGFS scenarios by including additional risk transmission channels and adding additional variables (working with climate scientists, academics and industry experts). As a result, the CBES scenarios are not identical to those produced by the NGFS, but they are consistent across many variables. Both the Early Action & Late Action scenarios correspond the NGFS Zero 2050 scenario, with the difference being the suddenness of the transition shock, leading to additional economic dislocation in the Late Action scenario. The NGFS assumptions driving transitions risks were derived using the REMIND-MAgPIE 2.1-4.2 Integrated Assessment Model. Both scenarios roughly correspond to the RCP 2.6° pathway. 135 | 240 The No Additional Action corresponds to the NGFS Current Policy scenario, with the caveat that most of the physical risks manifesting beyond the 2050 horizon are brought forward, in order to include them in the stress test horizon. The underlying assumptions were obtained by considering the GCAM 5.3 Integrated Assessment Model at the 90 th percentile, contrasting with the 50th percentile for the Early & Late Action scenarios. This scenario roughly corresponds to the RCP 6.0° pathway. Impact assessment Assessing these three scenarios allows Ageas to assess the financial impact via 2 primary channels:  Physical risks: associated with an increase in claims and losses due to climatic events (such as floods, droughts, storms), and changes in climatic trends (such as changing weather conditions or sea level rise). Physical risks can be broken down into two categories: - Acute physical risks: those which arise from certain events, especially weather-related events (e.g. floods, storms) - Chronic physical risks: those which arise from longer-term shifts in climate patterns (e.g. temperature changes, rising sea levels, changing soil moisture)  Transition risks are related to asset value losses and increased operating costs resulting from disruptions and shifts associated with a (sudden) transition from a carbon-intensive to a low-carbon economy. With these scenarios, Ageas also considers EIOPA’s recommendations published in April 2021 in their Opinion on the supervision of the use of climate change risk scenarios in ORSA, where insurance companies are recommended to identify material climate change risks and identify the materiality of the exposures to the risks through a combination of qualitative and quantitative analysis. Given that materialisation of risks related to climate change will extend over the long term, the assessment is not limited to the multi-year budget horizon, but prolonged until 2050 by considering 6 reference years being 2026, 2031, 2035, 2040, 2045 and 2050 6 . For the assets, the impacts reflect an instantaneous sensitivity under the three scenarios coming with a shock by type of assets and sector, reflecting a higher impact for less sustainable sectors while allowing a lower impact for more sustainable sectors. Ageas also selected the relevant financial variables for the ORSA exercise namely government bonds, corporate bonds, risk-free rates, real estate and equity. Gross Value Added (GVA) paths are also considered for each individual industry sector, reflecting the degree of exposure of each individual sector to climate risks. The impact assessment of climate change on the insurance liabilities was a local exercise with a focus on both qualitative and quantitative assessment. Physical risks are associated with an increase in claims and losses due to climatic events (such as floods, storms, …), and changes in climatic trends (such as changing weather conditions or sea level rise). To support the process of developing models on Climate Change, for internal risk assessment and regulatory/rating agencies requests, Ageas also decided to collaborate with different external partners, considered to be leaders of climate change understanding in the insurance sector and notably in conducting specific quantitative exercises focusing on Natural Catastrophe for entities covered by the Non-life Internal Model in collaboration. The results of the quantitative scenario analysis undertaken to assess the impact of physical risk on underwriting liabilities ultimately demonstrate that business-wide gross impacts on future peril (flood, subsidence, …) losses under all scenarios are considered manageable. 6 2026 can be considered in this context as representative for the MYB horizon (2022- 2026), 2031 is the pivotal year in the late action subscenario, while the others are based on 5-year periods until 2050. All the computations start from the balance sheet at Q2 2021, and therefore do not include any other movement in the fair value of assets than those foreseen in the subscenario. This is clearly not a realistic assumption for a long- term prevision, but it allows for comparability and shows the long-term vulnerability of the current asset mix to long term trends related to climate change. GENERAL NOTES 134 Ageas Annual Report 2021 134 | 240 Spotlight: Climate Change Risk Assessment With its new strategy Impact 24, Ageas puts sustainability and long-term thinking at the heart of the Group’s decision-making to make a positive and lasting impact for all stakeholders. In the new strategy, Ageas will strengthen the long-term, responsible approach to investment and reduce its environmental impact to become GHG-neutral in its own operations. While Management is convinced that these are critical steps to contribute to addressing the climate change challenges, Ageas strives to ensure an efficient management of the potential mid and long-term impacts of different climate change evolution and the implications for the insurance business and operations. In 2021, for the first time, to better understand and manage the short-, medium-, and long-term risks from climate change and how they will affect its business model Ageas performed climate change stress testing as part of its ORSA process. Ageas defined its approach, based on the Bank of England’s Prudential Regulation Authority (PRA) stress test approach in the Climate Biennial Exploratory Scenario (CBES). Scenario definition PRA 2021 Biennial Exploratory Scenario (BeS) served as inspiration for asset and liabilities stresses for transition and physical risks, considering type of investment and sector allocation. The impacts of the three hypothetical climate scenarios cover a 30-year time horizon on selected metrics of their business models and asset valuations:  Early Action: the transition to a net-zero emissions economy starts in 2021 so carbon taxes and other policies intensify relatively gradually over the scenario horizon leading to a drop in global carbon dioxide emissions to net-zero around 2050. Global warming is limited to 1.8°C by the end of the scenario (2050) relative to pre-industrial levels. Some sectors are more adversely affected by the transition than others, but the overall impact on GDP growth is muted, particularly in the latter half of the scenario once a significant portion of the required transition has occurred and the productivity benefits of green technology investments begin to be realized.  Late Action: the transition is delayed until 2031, at which point there is a sudden increase in the intensity of climate policy, leading to a successful reduction of greenhouse gas emissions to net-zero around 2050, but the transition required to achieve that is abrupt and therefore disorderly. Global warming is limited to 1.8°C by the end of the scenario (2050) relative to pre-industrial levels. The more compressed nature of the reduction in emissions results in material short-term macroeconomic disruption. This affects the whole economy but is particularly concentrated in carbon-intensive sectors.  The No Additional Action scenario. In this scenario, no new climate policies are introduced beyond those already implemented prior to 2021. The Bank has calibrated that scenario based on the physical risks that might be expected to materialize in the period from 2050 to 2080 if no further policy action were taken. The absence of transition policies leads to a growing concentration of greenhouse gas emissions in the atmosphere and, as a result, global temperature levels continue to increase, reaching 3.3°C relative to pre-industrial levels by the end of the scenario. This leads to chronic changes in precipitation, ecosystems and sea-level. There is also a rise in the frequency and severity of extreme weather events such as heatwaves, droughts, wildfires, tropical cyclones and flooding. There are permanent impacts on living and working conditions, buildings and infrastructure. Changes in physical hazards are unevenly distributed with tropical and subtropical regions affected more severely. Many of the impacts from physical risks are expected to become more severe later in the 21 st century and some will become irreversible. So the headwinds facing the economy would be expected to increase further into the future. The CBES scenario specification builds upon a subset of the Network for Greening the Financial System (NGFS) climate scenarios, which aim to provide central banks and supervisors with a common starting point for analyzing climate risks under different future pathways. The Bank of England has expanded on the NGFS scenarios by including additional risk transmission channels and adding additional variables (working with climate scientists, academics and industry experts). As a result, the CBES scenarios are not identical to those produced by the NGFS, but they are consistent across many variables. Both the Early Action & Late Action scenarios correspond the NGFS Zero 2050 scenario, with the difference being the suddenness of the transition shock, leading to additional economic dislocation in the Late Action scenario. The NGFS assumptions driving transitions risks were derived using the REMIND-MAgPIE 2.1-4.2 Integrated Assessment Model. Both scenarios roughly correspond to the RCP 2.6° pathway. 135 | 240 The No Additional Action corresponds to the NGFS Current Policy scenario, with the caveat that most of the physical risks manifesting beyond the 2050 horizon are brought forward, in order to include them in the stress test horizon. The underlying assumptions were obtained by considering the GCAM 5.3 Integrated Assessment Model at the 90 th percentile, contrasting with the 50th percentile for the Early & Late Action scenarios. This scenario roughly corresponds to the RCP 6.0° pathway. Impact assessment Assessing these three scenarios allows Ageas to assess the financial impact via 2 primary channels:  Physical risks: associated with an increase in claims and losses due to climatic events (such as floods, droughts, storms), and changes in climatic trends (such as changing weather conditions or sea level rise). Physical risks can be broken down into two categories: - Acute physical risks: those which arise from certain events, especially weather-related events (e.g. floods, storms) - Chronic physical risks: those which arise from longer-term shifts in climate patterns (e.g. temperature changes, rising sea levels, changing soil moisture)  Transition risks are related to asset value losses and increased operating costs resulting from disruptions and shifts associated with a (sudden) transition from a carbon-intensive to a low-carbon economy. With these scenarios, Ageas also considers EIOPA’s recommendations published in April 2021 in their Opinion on the supervision of the use of climate change risk scenarios in ORSA, where insurance companies are recommended to identify material climate change risks and identify the materiality of the exposures to the risks through a combination of qualitative and quantitative analysis. Given that materialisation of risks related to climate change will extend over the long term, the assessment is not limited to the multi-year budget horizon, but prolonged until 2050 by considering 6 reference years being 2026, 2031, 2035, 2040, 2045 and 2050 6 . For the assets, the impacts reflect an instantaneous sensitivity under the three scenarios coming with a shock by type of assets and sector, reflecting a higher impact for less sustainable sectors while allowing a lower impact for more sustainable sectors. Ageas also selected the relevant financial variables for the ORSA exercise namely government bonds, corporate bonds, risk-free rates, real estate and equity. Gross Value Added (GVA) paths are also considered for each individual industry sector, reflecting the degree of exposure of each individual sector to climate risks. The impact assessment of climate change on the insurance liabilities was a local exercise with a focus on both qualitative and quantitative assessment. Physical risks are associated with an increase in claims and losses due to climatic events (such as floods, storms, …), and changes in climatic trends (such as changing weather conditions or sea level rise). To support the process of developing models on Climate Change, for internal risk assessment and regulatory/rating agencies requests, Ageas also decided to collaborate with different external partners, considered to be leaders of climate change understanding in the insurance sector and notably in conducting specific quantitative exercises focusing on Natural Catastrophe for entities covered by the Non-life Internal Model in collaboration. The results of the quantitative scenario analysis undertaken to assess the impact of physical risk on underwriting liabilities ultimately demonstrate that business-wide gross impacts on future peril (flood, subsidence, …) losses under all scenarios are considered manageable. 6 2026 can be considered in this context as representative for the MYB horizon (2022- 2026), 2031 is the pivotal year in the late action subscenario, while the others are based on 5-year periods until 2050. All the computations start from the balance sheet at Q2 2021, and therefore do not include any other movement in the fair value of assets than those foreseen in the subscenario. This is clearly not a realistic assumption for a long- term prevision, but it allows for comparability and shows the long-term vulnerability of the current asset mix to long term trends related to climate change. 135 Ageas Annual Report 2021 136 | 240 Mitigation actions Different mitigation actions are already identified and considered in Ageas Risk management strategy, for both assets and liabilities.  Impact24: Ageas Group Strategy commits to EUR10 billion of investments making a positive contribution to the transition towards a more sustainable world, and ESG to be considered in 100% of investments.  The adherence to a Responsible Investment Framework which requires ESG to be integrated within the investment analysis and decision-making process.  Investment Policy: Updated to include specific reference to climate risk identification, mitigation and monitoring.  Judiciously choosing the sectors in which to invest. Given the fact that the sectors most resilient to physical risks are not necessarily the same as the sectors most resilient to transition risks, an arbitrage is to be operated in this choice.  Reinsurance consideration to absorb claims cost for natural catastrophes. Natural catastrophe risks (particularly those arising from Flood and Storms) are already monitored on a regular basis at local level to ensure that Cat models and reinsurance mitigation remains appropriate to our risk profile.  Short-term climate-related physical risk is heavily mitigated by the short-dated duration of liabilities, allowing for flexible risk selection and pricing accordingly, in particular for non-life insurance risk.  External partnerships: Engagement with external firms considered to be leaders of climate change understanding in the insurance sector.  ‘New way of working’ for employees. allowing our employees to work flexibly and remotely (limits the potential for natural catastrophes to compromise operations). It is important to note that this exercise was the first Ageas has performed in this important area and the business will continue to (i) develop and expand climate change modelling to cover additional perils (such as wildfire, subsidence…) and potential impacts, and (ii) refine these initial modelling approaches to make outputs as meaningful as possible. 4.7 Details of various risk exposures The following sections explain Ageas’s risk types and various risk exposures in more detail. 4.7.1 Financial risk Financial risk encompasses all risks relating to the value and performance of assets and liabilities that may affect solvency, earnings and liquidity due to changes in financial circumstances. These include:  Market risk;  Default risk;  Liquidity risk;  Intangible assets risk. Financial risk is the most material risk for many of Ageas’s operations. The risk framework in place at all operations combines investment policies, limits, stress tests and regular monitoring in order to control the nature and level of financial risks and to ensure that risks being taken are appropriate for both customer and shareholder and are appropriately rewarded. The overall asset mix is determined by local businesses based on asset mix studies to identify the appropriate strategic assets, their adequacy from an ALM perspective and on regular monitoring of the market situation and prospects to decide on the tactical allocation. The decision process needs to balance risk appetite, capital requirements, long-term risks and return, policyholder expectations, profit sharing requirements, tax and liquidity issues to arrive at an appropriate target mix. The mission of the Group Risk function includes monitoring aggregate exposures against risk appetite regarding financial risks, and working with the local businesses to develop policies and best practice, which must be adopted by the local Boards to ensure they become part of the local regular activity. 4.7.1.1 Market risk Market risk arises from adverse change in the financial situation resulting, directly or indirectly, from fluctuations in the level and in the volatility of market prices of assets and liabilities. It is composed of the following sub-risks: a. interest rate risk; b. equity risk; c. spread risk. d. currency risk; e. property risk; f. market risk concentration; g. inflation risk. The sensitivities presented in this note exclude the impact in non- controlled participations. A. INTEREST RATE RISK Interest rate risk exists for all assets and liabilities sensitive to changes in the term structure of interest rates or interest rate volatility. This applies to both real and nominal term structures. The risk arises as a result of a mismatch between the sensitivity of assets and liabilities to changes in interest rates and associated volatility, which can adversely impact the earnings and solvency position. Ageas measures, monitors and controls its interest rate risk using a number of indicators including cash flow mismatch analysis and stress testing. The investment and ALM policies usually require close matching unless specifically approved otherwise. Longer-term business can be difficult to match due to lack of availability of suitable assets. The matching strategy will be determined taking into account risk appetite, availability of (long-term) assets, current and prospective market rates and levels of guarantee. Derivatives are sometimes used to hedge interest rate risk. Note that low interest rates have been defined as a strategic risk with focus on fixed/variable cost structure. 137 | 240 The table below shows the gross impact on the IFRS income statement and IFRS equity as a result of a decrease in the interest rates for consolidated entities. An upwards/downwards shock is applied, corresponding to a 1/30 years return period (around 75bps on average). Some entities use a simplified method were a parallel stress of 100bps is considered. 2021 2020 Impact Impact Impact on on Impact on on income statement IFRS Equity income statement IFRS Equity Interest - rate down 4 396 4 433 Interest - rate up 2 (1,407) (8) (1,389) B. EQUITY RISK Equity risk arises from the sensitivity of assets and liabilities and financial instruments to changes in the level or volatility of market prices for equities or their yield, which can impact earnings and the solvency position. This risk is controlled through limit setting based on the risk appetite and by investment policies that require a range of controls to be in place including the action that will be taken in the event of significant decreases in value. Earlier pro-active management of this risk has resulted in the rapid reduction in exposure to equity risk through sales and hedging. This helps to limit losses and to ensure that the insurance companies remain solvent throughout a financial crisis. For risk management purposes, Ageas bases its definition of equity exposure on the economic reality of underlying assets and risks. Taking a risk based approach; the total economic exposure to equities at fair value is given in the table below together with the reconciliation to the IFRS reported figures. 2021 2020 Type of asset Direct equity investments 3,058 2,523 Equity funds 916 691 Private equity 191 118 Asset allocation funds 39 41 Total Economic equity exposure 4,204 3,373 Debt funds 424 417 Money market funds 221 244 Real estate funds (SICAFI/REITS) 1,023 1,002 Total IFRS equity exposure 5,872 5,036 of which: Available for Sale (see note 10) 5,669 4,875 Held at Fair Value (see note 10) 203 161 Sensitivities The table below shows the gross impact on the IFRS income statement and IFRS equity as the result of an equity shock corresponding to a 1/30 years return period down (around 30% for EAA listed equities) for consolidated entities. Impact on 2021 Impact on 2020 income Impact on income Impact on statement IFRS Equity statement IFRS Equity Equity risk downwards (281) (1,262) (170) (888) GENERAL NOTES 136 Ageas Annual Report 2021 136 | 240 Mitigation actions Different mitigation actions are already identified and considered in Ageas Risk management strategy, for both assets and liabilities.  Impact24: Ageas Group Strategy commits to EUR10 billion of investments making a positive contribution to the transition towards a more sustainable world, and ESG to be considered in 100% of investments.  The adherence to a Responsible Investment Framework which requires ESG to be integrated within the investment analysis and decision-making process.  Investment Policy: Updated to include specific reference to climate risk identification, mitigation and monitoring.  Judiciously choosing the sectors in which to invest. Given the fact that the sectors most resilient to physical risks are not necessarily the same as the sectors most resilient to transition risks, an arbitrage is to be operated in this choice.  Reinsurance consideration to absorb claims cost for natural catastrophes. Natural catastrophe risks (particularly those arising from Flood and Storms) are already monitored on a regular basis at local level to ensure that Cat models and reinsurance mitigation remains appropriate to our risk profile.  Short-term climate-related physical risk is heavily mitigated by the short-dated duration of liabilities, allowing for flexible risk selection and pricing accordingly, in particular for non-life insurance risk.  External partnerships: Engagement with external firms considered to be leaders of climate change understanding in the insurance sector.  ‘New way of working’ for employees. allowing our employees to work flexibly and remotely (limits the potential for natural catastrophes to compromise operations). It is important to note that this exercise was the first Ageas has performed in this important area and the business will continue to (i) develop and expand climate change modelling to cover additional perils (such as wildfire, subsidence…) and potential impacts, and (ii) refine these initial modelling approaches to make outputs as meaningful as possible. 4.7 Details of various risk exposures The following sections explain Ageas’s risk types and various risk exposures in more detail. 4.7.1 Financial risk Financial risk encompasses all risks relating to the value and performance of assets and liabilities that may affect solvency, earnings and liquidity due to changes in financial circumstances. These include:  Market risk;  Default risk;  Liquidity risk;  Intangible assets risk. Financial risk is the most material risk for many of Ageas’s operations. The risk framework in place at all operations combines investment policies, limits, stress tests and regular monitoring in order to control the nature and level of financial risks and to ensure that risks being taken are appropriate for both customer and shareholder and are appropriately rewarded. The overall asset mix is determined by local businesses based on asset mix studies to identify the appropriate strategic assets, their adequacy from an ALM perspective and on regular monitoring of the market situation and prospects to decide on the tactical allocation. The decision process needs to balance risk appetite, capital requirements, long-term risks and return, policyholder expectations, profit sharing requirements, tax and liquidity issues to arrive at an appropriate target mix. The mission of the Group Risk function includes monitoring aggregate exposures against risk appetite regarding financial risks, and working with the local businesses to develop policies and best practice, which must be adopted by the local Boards to ensure they become part of the local regular activity. 4.7.1.1 Market risk Market risk arises from adverse change in the financial situation resulting, directly or indirectly, from fluctuations in the level and in the volatility of market prices of assets and liabilities. It is composed of the following sub-risks: a. interest rate risk; b. equity risk; c. spread risk. d. currency risk; e. property risk; f. market risk concentration; g. inflation risk. The sensitivities presented in this note exclude the impact in non- controlled participations. A. INTEREST RATE RISK Interest rate risk exists for all assets and liabilities sensitive to changes in the term structure of interest rates or interest rate volatility. This applies to both real and nominal term structures. The risk arises as a result of a mismatch between the sensitivity of assets and liabilities to changes in interest rates and associated volatility, which can adversely impact the earnings and solvency position. Ageas measures, monitors and controls its interest rate risk using a number of indicators including cash flow mismatch analysis and stress testing. The investment and ALM policies usually require close matching unless specifically approved otherwise. Longer-term business can be difficult to match due to lack of availability of suitable assets. The matching strategy will be determined taking into account risk appetite, availability of (long-term) assets, current and prospective market rates and levels of guarantee. Derivatives are sometimes used to hedge interest rate risk. Note that low interest rates have been defined as a strategic risk with focus on fixed/variable cost structure. 137 | 240 The table below shows the gross impact on the IFRS income statement and IFRS equity as a result of a decrease in the interest rates for consolidated entities. An upwards/downwards shock is applied, corresponding to a 1/30 years return period (around 75bps on average). Some entities use a simplified method were a parallel stress of 100bps is considered. 2021 2020 Impact Impact Impact on on Impact on on income statement IFRS Equity income statement IFRS Equity Interest - rate down 4 396 4 433 Interest - rate up 2 (1,407) (8) (1,389) B. EQUITY RISK Equity risk arises from the sensitivity of assets and liabilities and financial instruments to changes in the level or volatility of market prices for equities or their yield, which can impact earnings and the solvency position. This risk is controlled through limit setting based on the risk appetite and by investment policies that require a range of controls to be in place including the action that will be taken in the event of significant decreases in value. Earlier pro-active management of this risk has resulted in the rapid reduction in exposure to equity risk through sales and hedging. This helps to limit losses and to ensure that the insurance companies remain solvent throughout a financial crisis. For risk management purposes, Ageas bases its definition of equity exposure on the economic reality of underlying assets and risks. Taking a risk based approach; the total economic exposure to equities at fair value is given in the table below together with the reconciliation to the IFRS reported figures. 2021 2020 Type of asset Direct equity investments 3,058 2,523 Equity funds 916 691 Private equity 191 118 Asset allocation funds 39 41 Total Economic equity exposure 4,204 3,373 Debt funds 424 417 Money market funds 221 244 Real estate funds (SICAFI/REITS) 1,023 1,002 Total IFRS equity exposure 5,872 5,036 of which: Available for Sale (see note 10) 5,669 4,875 Held at Fair Value (see note 10) 203 161 Sensitivities The table below shows the gross impact on the IFRS income statement and IFRS equity as the result of an equity shock corresponding to a 1/30 years return period down (around 30% for EAA listed equities) for consolidated entities. Impact on 2021 Impact on 2020 income Impact on income Impact on statement IFRS Equity statement IFRS Equity Equity risk downwards (281) (1,262) (170) (888) 137 Ageas Annual Report 2021 138 | 240 C. SPREAD RISK Spread risk results from the sensitivity of the value of assets and liabilities and financial instruments to changes in the level or in the volatility of spreads over the risk-free interest rate term structure. A significant portion of Ageas’s liabilities are relatively illiquid. Ageas generally aims to hold credit assets to maturity. This limits the long-term impact of spread risk significantly because Ageas typically holds these assets to maturity in line with its long-term illiquid liabilities. Although short-term volatility can be significant, it is unlikely that Ageas would be forced to sell at distressed prices, even though Ageas can choose to liquidate these assets if it considers this the best course of action. For internal risk management purposes, Ageas considers the sensitivity to long-term fundamental spread risk, similar to the Solvency II “Volatility Adjustment” concept, but taking into account its specific portfolio characteristics. This is considered more in line with Ageas’s business model, where realising capital losses is generally avoided, compared to a pure mark-to-market approach. Ageas’s spread risk treatment in the SCR ageas is as follows:  Inclusion of fundamental spread for EU sovereign and equivalent exposures;  Exclusion of non-fundamental spread for other debt. Sensitivities The sensitivities considered for the impact of credit spread widening on the income statement and IFRS equity depend on the credit rating and duration of the asset considered. These stresses correspond to a 1/30 return period, and range between +70bps for AAA rated assets to +200bps for BBB rated assets. Some operating entities apply a simplified method where the entire credit portfolio is shocked by +100bps. The table below shows the gross impact on the IFRS income statement and IFRS equity as the result of a spread sensitivity shock. Impact on 2021 Impact on 2020 income Impact on income Impact on statement IFRS Equity statement IFRS Equity Spread risk – Credit spread widening (14) (1,291) (15) (1,385) D. CURRENCY RISK Currency risk arises from the sensitivity of assets and liabilities to changes in the level of currency exchange rates when there is a mismatch between the relevant currency of the assets and liabilities. At Group level, this includes situations where Ageas has assets (in subsidiaries and equity associates) or liabilities (from funding) that are non-euro denominated. Ageas’s investment policy limits this risk by requiring the currency mismatch between assets and liabilities within subsidiaries to be minimised and in most cases it is eliminated entirely. Ageas’s policy is not to hedge equity investments and permanent funding for subsidiaries and equity associates in foreign currency. Ageas accepts the mismatch arising from ownership of local operating companies in non-euro currencies as a consequence of being an international group. 139 | 240 The main currency risk exposures to foreign currencies as at 31 December are stated in the following table. The exposures shown are net (assets minus liabilities), after any hedging denominated in euros. At 31 December 2021 HKD GBP USD CNY INR MYR PHP THB VND RON TRY Other Total assets 332 4,975 1,343 2,529 297 510 54 1,072 21 26 142 51 Total liabilities 11 4,011 1 1 7 Total assets minus liabilities 321 964 1,342 2,529 297 510 54 1,072 21 25 142 44 Off balance (22) (678) Net position 321 942 664 2,529 297 510 54 1,072 21 25 142 44 Of which invested in subsidiaries and equity associates 332 939 63 2,529 297 510 54 1,072 21 26 142 At 31 December 2020 HKD GBP USD CNY INR MYR PHP THB VND RON TRY Other Total assets 343 3,639 963 2,078 284 462 95 1,271 17 29 67 67 Total liabilities 10 2,620 1 1 5 Total assets minus liabilities 333 1,019 962 2,078 284 462 95 1,271 17 28 67 62 Off balance (21) (462) Net position 333 998 500 2,078 284 462 95 1,271 17 28 67 62 Of which invested in subsidiaries and equity associates 324 1,003 64 2,078 269 462 54 1,271 17 29 67 E. PROPERTY RISK Property risk arises as a result of sensitivity of assets and liabilities to the level or volatility of market prices of property or their yield. For risk management purposes, Ageas defines the exposure to real estate based on the market value of these assets, including assets held for own use and IFRS 16 lease assets. The exposure considered differs from the exposure reported under IFRS definitions, which excludes unrealised gains or losses. The table below identifies what Ageas considers economic exposure to real estate and how this is reconciled to the figures reported under IFRS. For internal risk management purposes, Ageas applies an internal model for real estate in its main subsidiaries, in which real estate risk is treated according to the underlying economic exposure, rather than IFRS classification of the assets. 2021 2020 Type of asset Carrying amount Investment properties (see note 11) 3,117 2,889 PP&E: land and buildings for own use and Car parks (see note 16) 1,592 1,678 Property intended for sale (see note 15) 323 228 Total (at amortised cost) 5,032 4,795 Real estate funds (at fair value) 1,023 1,002 Total IFRS real estate exposure 6,055 5,797 Unrealised capital gain (Economic exposure) Investment properties (see note 11) 1,249 1,270 PP&E: land and buildings for own use (see note 16) 723 623 Total Economic real estate exposure 8,027 7,690 Sensitivities The table below shows the gross impact on the IFRS income statement and IFRS equity as the result of a property stress corresponding to a 1/30 return period (on average 14%). Impact on 2021 Impact on 2020 income Impact on income Impact on statement IFRS Equity statement IFRS Equity Property risk downwards (203) (307) (189) (281) GENERAL NOTES 138 Ageas Annual Report 2021 138 | 240 C. SPREAD RISK Spread risk results from the sensitivity of the value of assets and liabilities and financial instruments to changes in the level or in the volatility of spreads over the risk-free interest rate term structure. A significant portion of Ageas’s liabilities are relatively illiquid. Ageas generally aims to hold credit assets to maturity. This limits the long-term impact of spread risk significantly because Ageas typically holds these assets to maturity in line with its long-term illiquid liabilities. Although short-term volatility can be significant, it is unlikely that Ageas would be forced to sell at distressed prices, even though Ageas can choose to liquidate these assets if it considers this the best course of action. For internal risk management purposes, Ageas considers the sensitivity to long-term fundamental spread risk, similar to the Solvency II “Volatility Adjustment” concept, but taking into account its specific portfolio characteristics. This is considered more in line with Ageas’s business model, where realising capital losses is generally avoided, compared to a pure mark-to-market approach. Ageas’s spread risk treatment in the SCR ageas is as follows:  Inclusion of fundamental spread for EU sovereign and equivalent exposures;  Exclusion of non-fundamental spread for other debt. Sensitivities The sensitivities considered for the impact of credit spread widening on the income statement and IFRS equity depend on the credit rating and duration of the asset considered. These stresses correspond to a 1/30 return period, and range between +70bps for AAA rated assets to +200bps for BBB rated assets. Some operating entities apply a simplified method where the entire credit portfolio is shocked by +100bps. The table below shows the gross impact on the IFRS income statement and IFRS equity as the result of a spread sensitivity shock. Impact on 2021 Impact on 2020 income Impact on income Impact on statement IFRS Equity statement IFRS Equity Spread risk – Credit spread widening (14) (1,291) (15) (1,385) D. CURRENCY RISK Currency risk arises from the sensitivity of assets and liabilities to changes in the level of currency exchange rates when there is a mismatch between the relevant currency of the assets and liabilities. At Group level, this includes situations where Ageas has assets (in subsidiaries and equity associates) or liabilities (from funding) that are non-euro denominated. Ageas’s investment policy limits this risk by requiring the currency mismatch between assets and liabilities within subsidiaries to be minimised and in most cases it is eliminated entirely. Ageas’s policy is not to hedge equity investments and permanent funding for subsidiaries and equity associates in foreign currency. Ageas accepts the mismatch arising from ownership of local operating companies in non-euro currencies as a consequence of being an international group. 139 | 240 The main currency risk exposures to foreign currencies as at 31 December are stated in the following table. The exposures shown are net (assets minus liabilities), after any hedging denominated in euros. At 31 December 2021 HKD GBP USD CNY INR MYR PHP THB VND RON TRY Other Total assets 332 4,975 1,343 2,529 297 510 54 1,072 21 26 142 51 Total liabilities 11 4,011 1 1 7 Total assets minus liabilities 321 964 1,342 2,529 297 510 54 1,072 21 25 142 44 Off balance (22) (678) Net position 321 942 664 2,529 297 510 54 1,072 21 25 142 44 Of which invested in subsidiaries and equity associates 332 939 63 2,529 297 510 54 1,072 21 26 142 At 31 December 2020 HKD GBP USD CNY INR MYR PHP THB VND RON TRY Other Total assets 343 3,639 963 2,078 284 462 95 1,271 17 29 67 67 Total liabilities 10 2,620 1 1 5 Total assets minus liabilities 333 1,019 962 2,078 284 462 95 1,271 17 28 67 62 Off balance (21) (462) Net position 333 998 500 2,078 284 462 95 1,271 17 28 67 62 Of which invested in subsidiaries and equity associates 324 1,003 64 2,078 269 462 54 1,271 17 29 67 E. PROPERTY RISK Property risk arises as a result of sensitivity of assets and liabilities to the level or volatility of market prices of property or their yield. For risk management purposes, Ageas defines the exposure to real estate based on the market value of these assets, including assets held for own use and IFRS 16 lease assets. The exposure considered differs from the exposure reported under IFRS definitions, which excludes unrealised gains or losses. The table below identifies what Ageas considers economic exposure to real estate and how this is reconciled to the figures reported under IFRS. For internal risk management purposes, Ageas applies an internal model for real estate in its main subsidiaries, in which real estate risk is treated according to the underlying economic exposure, rather than IFRS classification of the assets. 2021 2020 Type of asset Carrying amount Investment properties (see note 11) 3,117 2,889 PP&E: land and buildings for own use and Car parks (see note 16) 1,592 1,678 Property intended for sale (see note 15) 323 228 Total (at amortised cost) 5,032 4,795 Real estate funds (at fair value) 1,023 1,002 Total IFRS real estate exposure 6,055 5,797 Unrealised capital gain (Economic exposure) Investment properties (see note 11) 1,249 1,270 PP&E: land and buildings for own use (see note 16) 723 623 Total Economic real estate exposure 8,027 7,690 Sensitivities The table below shows the gross impact on the IFRS income statement and IFRS equity as the result of a property stress corresponding to a 1/30 return period (on average 14%). Impact on 2021 Impact on 2020 income Impact on income Impact on statement IFRS Equity statement IFRS Equity Property risk downwards (203) (307) (189) (281) 139 Ageas Annual Report 2021 140 | 240 F. MARKET CONCENTRATION RISK Market risk concentration refers to risks stemming from a lack of diversification in the asset portfolio stemming from a large exposure by a single issuer of securities or a group of related issuers. Concentration risk can arise due to large aggregate exposures to single counterparties or an aggregate of exposures to a number of positively correlated counterparties (i.e. tendency to default under similar circumstances) with the potential to produce a significant amount of impairments due to a bankruptcy or failure to pay. Avoidance of concentration is therefore fundamental to Ageas credit risk strategy of maintaining granular, liquid and diversified portfolios. Each local business is responsible for its own counterparty limits, taking into account its particular situation and any Group requirements. Each local business is in charge of continuous monitoring. Periodic reporting allows the Group to check these limits and monitor the overall position. To manage the concentration of credit risk, Ageas’s investment limits aim to spread the credit risk across different sectors and countries. Ageas monitors its largest exposures to individual entities, groups of companies (Total One Obligor) and other potential concentrations such as sectors and geographic areas to ensure adequate diversification and identification of significant concentration risk. G. INFLATION RISK Inflation risk arises through the impact of the level or volatility of inflation rates on the value of assets & liabilities. Ageas does not actively seek to take on inflation risk; however, it may choose to hold assets whose returns are explicitly linked to inflation. Moreover, some insurance liabilities are explicitly or implicitly dependent on inflation rates. Where Ageas considers that the inflation risk is not adequately covered in under the regulatory capital regime or through indirect methods, it may consider an explicit add-on for inflation risk under Pillar II. This is currently done in countries with material inflation risk related to annuities stemming from Workmen’s Compensation policies. The table below provides information on the concentration of credit risk as at 31 December by type and by location of the Ageas entity. Government and official Credit Corporate Retail 31 December 2021 Institutions Institutions Customers Customers Other Total Belgium 33,435 15,281 7,924 1,681 78 58,399 UK 340 1,142 1,708 38 3,228 Continental Europe 6,344 2,539 712 20 82 9,697 - France 2,014 792 51 20 22 2,899 - Portugal 4,330 1,747 661 60 6,798 Asia 4 8 12 Reinsurance 522 979 236 1,737 General Account and eliminations 1,106 (1,516) 97 (313) Total 40,641 21,051 9,064 1,701 303 72,760 Government and official Credit Corporate Retail 31 December 2020 Institutions Institutions Customers Customers Other Total Belgium 36,168 16,502 6,820 1,619 81 61,190 UK 332 1,127 1,578 39 3,076 Continental Europe 6,867 3,017 669 22 92 10,667 - France 2,192 889 70 22 42 3,215 - Portugal 4,675 2,128 599 50 7,452 Asia 4 1 5 Reinsurance 500 833 114 8 1,455 General Account and eliminations 1,210 (1,435) 211 (14) Total 43,867 22,693 7,746 1,641 432 76,379 * The line ‘General Account and eliminations’ in 2021 is mainly linked to the reinsurance programme and Group Treasury. 141 | 240 The table below provides information on the concentration of credit risk as at 31 December by type and location of counterparty. Government and official Credit Corporate Retail 31 December 2021 institutions Institutions Customers Customers Other Total Belgium 20,604 2,308 2,343 1,681 166 27,102 UK 235 1,415 905 37 2,592 Continental Europe 19,700 13,512 5,730 20 46 39,008 - France 6,193 4,265 1,362 20 22 11,862 - Portugal 2,530 255 241 21 3,047 - Other 10,977 8,992 4,127 3 24,099 Asia 493 65 2 560 Other countries 102 3,323 21 52 3,498 Total 40,641 21,051 9,064 1,701 303 72,760 Government and official Credit Corporate Retail 31 December 2020 institutions Institutions Customers Customers Other Total Belgium 22,153 2,281 1,833 1,619 245 28,131 UK 216 1,544 820 48 2,628 Continental Europe 21,388 15,204 5,075 22 82 41,771 - France 6,706 4,769 1,337 22 57 12,891 - Portugal 2,882 352 166 10 3,410 - Other 11,800 10,083 3,572 15 25,470 Asia 279 1 280 Other countries 110 3,385 18 56 3,569 Total 43,867 22,693 7,746 1,641 432 76,379 The table below shows the highest exposures to ultimate parents measured at fair value and nominal value with their ratings. Highest Exposure Top 10 Group Rating Fair Value Nominal Value Kingdom of Belgium AA- 20,069 15,166 French Republic AA 6,274 4,777 Portuguese Republic BBB 3,792 3,119 Kingdom of Spain A- 2,418 1,797 Republic of Austria AA+ 2,307 1,744 Republic of Italy BBB 1,541 1,537 Federal Republic of Germany AAA 1,446 1,101 BNP Paribas SA A+ 1,039 834 EUROPEAN INVESTMENT BANK AAA 1,106 918 European Financial Stability Facility (EFSF) AA+ 771 613 Total 40,763 31,606 The Kingdom of Belgium remains the top counterparty in line with the strategy to ‘redomesticate’ at the cost of increasing the risk towards the home country. GENERAL NOTES 140 Ageas Annual Report 2021 140 | 240 F. MARKET CONCENTRATION RISK Market risk concentration refers to risks stemming from a lack of diversification in the asset portfolio stemming from a large exposure by a single issuer of securities or a group of related issuers. Concentration risk can arise due to large aggregate exposures to single counterparties or an aggregate of exposures to a number of positively correlated counterparties (i.e. tendency to default under similar circumstances) with the potential to produce a significant amount of impairments due to a bankruptcy or failure to pay. Avoidance of concentration is therefore fundamental to Ageas credit risk strategy of maintaining granular, liquid and diversified portfolios. Each local business is responsible for its own counterparty limits, taking into account its particular situation and any Group requirements. Each local business is in charge of continuous monitoring. Periodic reporting allows the Group to check these limits and monitor the overall position. To manage the concentration of credit risk, Ageas’s investment limits aim to spread the credit risk across different sectors and countries. Ageas monitors its largest exposures to individual entities, groups of companies (Total One Obligor) and other potential concentrations such as sectors and geographic areas to ensure adequate diversification and identification of significant concentration risk. G. INFLATION RISK Inflation risk arises through the impact of the level or volatility of inflation rates on the value of assets & liabilities. Ageas does not actively seek to take on inflation risk; however, it may choose to hold assets whose returns are explicitly linked to inflation. Moreover, some insurance liabilities are explicitly or implicitly dependent on inflation rates. Where Ageas considers that the inflation risk is not adequately covered in under the regulatory capital regime or through indirect methods, it may consider an explicit add-on for inflation risk under Pillar II. This is currently done in countries with material inflation risk related to annuities stemming from Workmen’s Compensation policies. The table below provides information on the concentration of credit risk as at 31 December by type and by location of the Ageas entity. Government and official Credit Corporate Retail 31 December 2021 Institutions Institutions Customers Customers Other Total Belgium 33,435 15,281 7,924 1,681 78 58,399 UK 340 1,142 1,708 38 3,228 Continental Europe 6,344 2,539 712 20 82 9,697 - France 2,014 792 51 20 22 2,899 - Portugal 4,330 1,747 661 60 6,798 Asia 4 8 12 Reinsurance 522 979 236 1,737 General Account and eliminations* 1,106 (1,516) 97 (313) Total 40,641 21,051 9,064 1,701 303 72,760 Government and official Credit Corporate Retail 31 December 2020 Institutions Institutions Customers Customers Other Total Belgium 36,168 16,502 6,820 1,619 81 61,190 UK 332 1,127 1,578 39 3,076 Continental Europe 6,867 3,017 669 22 92 10,667 - France 2,192 889 70 22 42 3,215 - Portugal 4,675 2,128 599 50 7,452 Asia 4 1 5 Reinsurance 500 833 114 8 1,455 General Account and eliminations 1,210 (1,435) 211 (14) Total 43,867 22,693 7,746 1,641 432 76,379 * The line ‘General Account and eliminations’ in 2021 is mainly linked to the reinsurance programme and Group Treasury. 141 | 240 The table below provides information on the concentration of credit risk as at 31 December by type and location of counterparty. Government and official Credit Corporate Retail 31 December 2021 institutions Institutions Customers Customers Other Total Belgium 20,604 2,308 2,343 1,681 166 27,102 UK 235 1,415 905 37 2,592 Continental Europe 19,700 13,512 5,730 20 46 39,008 - France 6,193 4,265 1,362 20 22 11,862 - Portugal 2,530 255 241 21 3,047 - Other 10,977 8,992 4,127 3 24,099 Asia 493 65 2 560 Other countries 102 3,323 21 52 3,498 Total 40,641 21,051 9,064 1,701 303 72,760 Government and official Credit Corporate Retail 31 December 2020 institutions Institutions Customers Customers Other Total Belgium 22,153 2,281 1,833 1,619 245 28,131 UK 216 1,544 820 48 2,628 Continental Europe 21,388 15,204 5,075 22 82 41,771 - France 6,706 4,769 1,337 22 57 12,891 - Portugal 2,882 352 166 10 3,410 - Other 11,800 10,083 3,572 15 25,470 Asia 279 1 280 Other countries 110 3,385 18 56 3,569 Total 43,867 22,693 7,746 1,641 432 76,379 The table below shows the highest exposures to ultimate parents measured at fair value and nominal value with their ratings. Highest Exposure Top 10 Group Rating Fair Value Nominal Value Kingdom of Belgium AA- 20,069 15,166 French Republic AA 6,274 4,777 Portuguese Republic BBB 3,792 3,119 Kingdom of Spain A- 2,418 1,797 Republic of Austria AA+ 2,307 1,744 Republic of Italy BBB 1,541 1,537 Federal Republic of Germany AAA 1,446 1,101 BNP Paribas SA A+ 1,039 834 EUROPEAN INVESTMENT BANK AAA 1,106 918 European Financial Stability Facility (EFSF) AA+ 771 613 Total 40,763 31,606 The Kingdom of Belgium remains the top counterparty in line with the strategy to ‘redomesticate’ at the cost of increasing the risk towards the home country. 141 Ageas Annual Report 2021 142 | 240 4.7.1.2 Default risk Default risk is composed of two sub-risks: a. investment default risk; b. counterparty default risk. The credit exposures can be found in note 9 Cash and cash equivalents; note 12 Loans; Note 27 Derivatives held for Trading and note 28 Commitments. The table below provides information on the impaired credit risk exposure as at 31 December. 2021 2020 Impairments Impairments Impaired for specific Coverage Impaired for specific Coverage outstanding credit risk ratio outstanding credit risk ratio Interest bearing investments (see note 10) 6 (21) 350.0% 10 (22) 220.0% Loans (see note 12) 43 (25) 58.1% 48 (26) 54.2% Other receivables (see note 14) 32 (52) 162.5% 34 (54) 158.8% Total impaired credit exposure 81 (98) 121.0% 92 (102) 110.9% A. INVESTMENT DEFAULT RISK The investment default risk represents the risk of actual default of Ageas’s investments. Value movements due to market short-term volatility are covered under market risk. This does not include contracts covered under counterparty default risk (see section B). This risk is managed through limits which take into account the type of credit exposure, credit quality and, where needed, maturity, and through regular monitoring and early warning systems. Investment exposures are monitored through a quarterly Limit Breach Report. Limits are monitored on fair values based on asset classification. The limits are defined by the following categories. Limits on government bonds are defined by country in multiple ways:  ‘macro limits’, defined as percentages of gross domestic product (GDP), government debt and investment assets;  Total One Obligor (TOO) limits defined as maximum exposure to one obligor based on credit ratings;  (re-)investment restrictions: Increases in exposure to sovereigns rated BBB are only allowed on the condition of having a stable outlook. No new investments in sovereign debt with a rating below BBB without the approval of the Ageas Risk Committee. Limits on corporate bonds are also defined on multiple criteria:  Total corporate bonds exposure as a percentage of the portfolio;  Limits in function of the solvency capital required for spread risk;  Limits by sector based on the credit ratings;  Monitoring of concentrated exposure;  Total One Obligor. The credit rating applied by Ageas is based on the second best available rating from Moody’s, Fitch and Standard & Poor’s. For specific exposure types, other rating agencies can be used, for example AM Best for reinsurance counterparties. In the paragraphs hereafter, more detail is provided on the credit quality of: loans; interest bearing investments; government bonds; corporate bonds; banks and other financials. 143 | 240 1 Loans The table below provides information on the credit quality of loans. 2021 2020 Carrying value Carrying value Investment grade AAA 1,402 1,361 AA 2,335 2,235 A 2,262 2,119 BBB 331 170 Investment grade 6,330 5,885 Below investment grade Unrated 7,016 6,363 Residential mortgages 1,175 1,179 Total investments in loans, gross 14,521 13,427 Impairments (29) (29) Total investments in loans, net (see note 12) 14,492 13,398 2 Interest bearing investments The table below outlines the credit quality of interest bearing investments showing a constant proportion of investment grade investments as at 31 December. 2021 2020 Carrying value Carrying value Investment grade AAA 4,010 4,359 AA 27,883 31,065 A 6,432 8,907 BBB 13,820 12,385 Investment grade 52,145 56,716 Below investment grade 195 277 Unrated 1,734 1,665 Total investments in interest bearing securities, net 54,074 58,658 Impairments 21 22 Total investments in interest bearing securities, gross (see note 10) 54,095 58,680 GENERAL NOTES 142 Ageas Annual Report 2021 142 | 240 4.7.1.2 Default risk Default risk is composed of two sub-risks: a. investment default risk; b. counterparty default risk. The credit exposures can be found in note 9 Cash and cash equivalents; note 12 Loans; Note 27 Derivatives held for Trading and note 28 Commitments. The table below provides information on the impaired credit risk exposure as at 31 December. 2021 2020 Impairments Impairments Impaired for specific Coverage Impaired for specific Coverage outstanding credit risk ratio outstanding credit risk ratio Interest bearing investments (see note 10) 6 (21) 350.0% 10 (22) 220.0% Loans (see note 12) 43 (25) 58.1% 48 (26) 54.2% Other receivables (see note 14) 32 (52) 162.5% 34 (54) 158.8% Total impaired credit exposure 81 (98) 121.0% 92 (102) 110.9% A. INVESTMENT DEFAULT RISK The investment default risk represents the risk of actual default of Ageas’s investments. Value movements due to market short-term volatility are covered under market risk. This does not include contracts covered under counterparty default risk (see section B). This risk is managed through limits which take into account the type of credit exposure, credit quality and, where needed, maturity, and through regular monitoring and early warning systems. Investment exposures are monitored through a quarterly Limit Breach Report. Limits are monitored on fair values based on asset classification. The limits are defined by the following categories. Limits on government bonds are defined by country in multiple ways:  ‘macro limits’, defined as percentages of gross domestic product (GDP), government debt and investment assets;  Total One Obligor (TOO) limits defined as maximum exposure to one obligor based on credit ratings;  (re-)investment restrictions: Increases in exposure to sovereigns rated BBB are only allowed on the condition of having a stable outlook. No new investments in sovereign debt with a rating below BBB without the approval of the Ageas Risk Committee. Limits on corporate bonds are also defined on multiple criteria:  Total corporate bonds exposure as a percentage of the portfolio;  Limits in function of the solvency capital required for spread risk;  Limits by sector based on the credit ratings;  Monitoring of concentrated exposure;  Total One Obligor. The credit rating applied by Ageas is based on the second best available rating from Moody’s, Fitch and Standard & Poor’s. For specific exposure types, other rating agencies can be used, for example AM Best for reinsurance counterparties. In the paragraphs hereafter, more detail is provided on the credit quality of: loans; interest bearing investments; government bonds; corporate bonds; banks and other financials. 143 | 240 1 Loans The table below provides information on the credit quality of loans. 2021 2020 Carrying value Carrying value Investment grade AAA 1,402 1,361 AA 2,335 2,235 A 2,262 2,119 BBB 331 170 Investment grade 6,330 5,885 Below investment grade Unrated 7,016 6,363 Residential mortgages 1,175 1,179 Total investments in loans, gross 14,521 13,427 Impairments (29) (29) Total investments in loans, net (see note 12) 14,492 13,398 2 Interest bearing investments The table below outlines the credit quality of interest bearing investments showing a constant proportion of investment grade investments as at 31 December. 2021 2020 Carrying value Carrying value Investment grade AAA 4,010 4,359 AA 27,883 31,065 A 6,432 8,907 BBB 13,820 12,385 Investment grade 52,145 56,716 Below investment grade 195 277 Unrated 1,734 1,665 Total investments in interest bearing securities, net 54,074 58,658 Impairments 21 22 Total investments in interest bearing securities, gross (see note 10) 54,095 58,680 143 Ageas Annual Report 2021 144 | 240 GOVERNMENT BONDS The table below provides information on the credit quality of government bonds. 31 December 2021 31 December 2020 By IFRS classification Available for sale 31,140 34,302 Held at fair value through profit or loss Held to maturity 4,351 4,416 Total government bonds (see note 10) 35,491 38,718 By rating AAA 2,251 2,273 AA 25,546 28,261 A 1,269 3,604 BBB 6,381 4,532 Total investment grade 35,447 38,670 Below investment grade 25 27 Unrated 19 21 Total non-investment grade and unrated 44 48 Total government bonds 35,491 38,718 CORPORATE BONDS The table below provides information on the credit quality of corporate bonds. 31 December 2021 31 December 2020 By IFRS classification Available for sale 11,680 12,526 Total corporate bonds (see note 10) 11,680 12,526 By rating AAA 40 41 AA 648 876 A 3,617 3,687 BBB 6,368 6,781 Total investment grade 10,674 11,385 Below investment grade 163 239 Unrated 843 902 Total non-investment grade and unrated 1,006 1,141 Total corporate bonds 11,680 12,526 BANKS AND OTHER FINANCIALS The table below provides information on the credit quality of banks and other financial institutions. 31 December 2021 31 December 2020 By IFRS classification Available for sale 6,715 7,229 Held at fair value through profit or loss 134 130 Total banking and other financials (see note 10) 6,849 7,359 By rating AAA 1,719 2,037 AA 1,674 1,916 A 1,544 1,604 BBB 1,070 1,072 Total investment grade 6,007 6,629 Below investment grade 7 10 Unrated 835 720 Total non-investment grade and unrated 842 730 Total banks and other financials 6,849 7,359 145 | 240 B. COUNTERPARTY DEFAULT RISK Counterparty default risk reflects possible losses due to unexpected default, or deterioration in the credit standing, of counterparties and debtors. The scope of the counterparty default risk category includes risk-mitigating contracts (such as reinsurance arrangements, securitisations and derivatives), cash, receivables from intermediaries, diversfied mortgage portfolios, and other credit exposure not covered elsewhere. Counterparty default risk can arise due to the purchase of reinsurance or other risk mitigation contracts. Ageas minimises this risk through policies on counterparty selection, collateral requirements and diversification. Within Ageas, this risk is mitigated through the application of Ageas’s Default Risk Policy and close monitoring of outstanding counterparty default positions. Diversification and avoidance of low rated exposures are key elements in the mitigation of this risk. Impairment for specific credit risk is established if there is objective evidence that Ageas will not be able to collect all amounts due in accordance with contractual terms. The amount of the impairment is the difference between the carrying amount and the recoverable amount. In the case of market traded securities, the recoverable amount is the fair value. Impairments are based on Ageas’s latest estimate of the recoverable amount and represent the loss that Ageas considers it will incur. Conditions for write-off may be that the obligor’s bankruptcy proceedings have been finalised and securities have been exhausted, the obligor and/or guarantors are insolvent, all normal recovery efforts have been exhausted, or the economic loss period (i.e. the period within which all expenses will exceed the recoverable amount) has been reached. 4.7.1.3 Liquidity risk Liquidity risk is the risk of being unable to liquidate investments and other assets in order to settle financial obligations when they fall due. For example, this can occur when unexpected cash demands of policyholders, and other contract holders, cannot be met without suffering losses or without endangering the business franchise due to constraints on liquidating assets. These constraints may be structural or due to market disruption. The financial commitments of Ageas and its local businesses are often long-term, and generally assets held to back these would be long-term and may not be liquid. Claims and other outflows can be unpredictable and may differ significantly from expected amounts. If liquid resources are not available to meet a financial commitment as it falls due, liquid funds will need to be borrowed and/or illiquid assets sold (which may trigger a significant loss in value) in order to meet the commitment. Losses would arise from any discount that would need to be offered to liquidate assets. As an insurance group, Ageas is normally cash accretive and hence this risk is relatively remote. Ageas keeps a cash position in order to be able to withstand adverse liquidity conditions if and when arising. Special attention is paid to the messages from central banks on potential changes in monetary policy stance. Dividend payments to shareholders together with holding costs are financed by dividend upstream from Ageas operating insurance entities. Causes of liquidity risk in the operating companies can be split into elements that can create a sudden increase in the need for cash and elements that can reduce unexpectedly the availability of expected resources to cover cash needs. Types of liquidity risk are the following:  Underwriting liquidity risk is the risk that Ageas or a local business needs to pay a material amount to cover unanticipated changes in customer behaviour (lapse risk), sudden rise in frequency claims or sudden large claims resulting from large or catastrophic events such as windstorms, ash clouds, flu pandemic, etc.;  Market liquidity risk is the risk that the process of selling in itself results in losses due to market conditions or high concentrations;  Funding liquidity risk is the risk that Ageas or a local business will not be able to obtain sufficient outside funding, in case its assets are illiquid, at the time it is needed (for example, to meet an unanticipated large claim). Each business has to ensure they can meet all liquidity requirements by identifying and monitoring liquidity risk, so that the circumstances under which liquidity issues could be possible are known and understood (i.e. unexpected adverse change in liability run-off profile, mass lapse event, slowdown in new business, change in rating), as well as the business’s ability to respond to such issues (i.e. liquidity of assets in a crisis) is clear. GENERAL NOTES 144 Ageas Annual Report 2021 144 | 240 GOVERNMENT BONDS The table below provides information on the credit quality of government bonds. 31 December 2021 31 December 2020 By IFRS classification Available for sale 31,140 34,302 Held at fair value through profit or loss Held to maturity 4,351 4,416 Total government bonds (see note 10) 35,491 38,718 By rating AAA 2,251 2,273 AA 25,546 28,261 A 1,269 3,604 BBB 6,381 4,532 Total investment grade 35,447 38,670 Below investment grade 25 27 Unrated 19 21 Total non-investment grade and unrated 44 48 Total government bonds 35,491 38,718 CORPORATE BONDS The table below provides information on the credit quality of corporate bonds. 31 December 2021 31 December 2020 By IFRS classification Available for sale 11,680 12,526 Total corporate bonds (see note 10) 11,680 12,526 By rating AAA 40 41 AA 648 876 A 3,617 3,687 BBB 6,368 6,781 Total investment grade 10,674 11,385 Below investment grade 163 239 Unrated 843 902 Total non-investment grade and unrated 1,006 1,141 Total corporate bonds 11,680 12,526 BANKS AND OTHER FINANCIALS The table below provides information on the credit quality of banks and other financial institutions. 31 December 2021 31 December 2020 By IFRS classification Available for sale 6,715 7,229 Held at fair value through profit or loss 134 130 Total banking and other financials (see note 10) 6,849 7,359 By rating AAA 1,719 2,037 AA 1,674 1,916 A 1,544 1,604 BBB 1,070 1,072 Total investment grade 6,007 6,629 Below investment grade 7 10 Unrated 835 720 Total non-investment grade and unrated 842 730 Total banks and other financials 6,849 7,359 145 | 240 B. COUNTERPARTY DEFAULT RISK Counterparty default risk reflects possible losses due to unexpected default, or deterioration in the credit standing, of counterparties and debtors. The scope of the counterparty default risk category includes risk-mitigating contracts (such as reinsurance arrangements, securitisations and derivatives), cash, receivables from intermediaries, diversfied mortgage portfolios, and other credit exposure not covered elsewhere. Counterparty default risk can arise due to the purchase of reinsurance or other risk mitigation contracts. Ageas minimises this risk through policies on counterparty selection, collateral requirements and diversification. Within Ageas, this risk is mitigated through the application of Ageas’s Default Risk Policy and close monitoring of outstanding counterparty default positions. Diversification and avoidance of low rated exposures are key elements in the mitigation of this risk. Impairment for specific credit risk is established if there is objective evidence that Ageas will not be able to collect all amounts due in accordance with contractual terms. The amount of the impairment is the difference between the carrying amount and the recoverable amount. In the case of market traded securities, the recoverable amount is the fair value. Impairments are based on Ageas’s latest estimate of the recoverable amount and represent the loss that Ageas considers it will incur. Conditions for write-off may be that the obligor’s bankruptcy proceedings have been finalised and securities have been exhausted, the obligor and/or guarantors are insolvent, all normal recovery efforts have been exhausted, or the economic loss period (i.e. the period within which all expenses will exceed the recoverable amount) has been reached. 4.7.1.3 Liquidity risk Liquidity risk is the risk of being unable to liquidate investments and other assets in order to settle financial obligations when they fall due. For example, this can occur when unexpected cash demands of policyholders, and other contract holders, cannot be met without suffering losses or without endangering the business franchise due to constraints on liquidating assets. These constraints may be structural or due to market disruption. The financial commitments of Ageas and its local businesses are often long-term, and generally assets held to back these would be long-term and may not be liquid. Claims and other outflows can be unpredictable and may differ significantly from expected amounts. If liquid resources are not available to meet a financial commitment as it falls due, liquid funds will need to be borrowed and/or illiquid assets sold (which may trigger a significant loss in value) in order to meet the commitment. Losses would arise from any discount that would need to be offered to liquidate assets. As an insurance group, Ageas is normally cash accretive and hence this risk is relatively remote. Ageas keeps a cash position in order to be able to withstand adverse liquidity conditions if and when arising. Special attention is paid to the messages from central banks on potential changes in monetary policy stance. Dividend payments to shareholders together with holding costs are financed by dividend upstream from Ageas operating insurance entities. Causes of liquidity risk in the operating companies can be split into elements that can create a sudden increase in the need for cash and elements that can reduce unexpectedly the availability of expected resources to cover cash needs. Types of liquidity risk are the following:  Underwriting liquidity risk is the risk that Ageas or a local business needs to pay a material amount to cover unanticipated changes in customer behaviour (lapse risk), sudden rise in frequency claims or sudden large claims resulting from large or catastrophic events such as windstorms, ash clouds, flu pandemic, etc.;  Market liquidity risk is the risk that the process of selling in itself results in losses due to market conditions or high concentrations;  Funding liquidity risk is the risk that Ageas or a local business will not be able to obtain sufficient outside funding, in case its assets are illiquid, at the time it is needed (for example, to meet an unanticipated large claim). Each business has to ensure they can meet all liquidity requirements by identifying and monitoring liquidity risk, so that the circumstances under which liquidity issues could be possible are known and understood (i.e. unexpected adverse change in liability run-off profile, mass lapse event, slowdown in new business, change in rating), as well as the business’s ability to respond to such issues (i.e. liquidity of assets in a crisis) is clear. 145 Ageas Annual Report 2021 146 | 240 An overview of expected outflows stemming from insurance liabilities (other than unit-linked) can be found below. These cash flows reflect an actuarial Best Estimate using Solvency II contract boundaries. Note that the Group aggregate liability outflows are not used for management purposes, as liquidity is managed within the individual insurance companies. Year 1 Year 2 Year 3 Year 4 Year 5 Net cash outflows from insurance liabilities as at 31 December 2021 2022 2023 2024 2025 2026 Policyholder liabilities, excluding unit-linked business, net of reinsurance 8,098 6,711 6,275 4,759 4,863 Year 1 Year 2 Year 3 Year 4 Year 5 Net cash outflows from insurance liabilities as at 31 December 2020 2021 2022 2023 2024 2025 Policyholder liabilities, excluding unit-linked business, net of reinsurance 7,243 6,559 5,891 5,720 4,233 4.7.1.4 Intangible assets risk Intangible assets risk is the risk of loss or adverse change in the value of intangible assets due to a change in expected future benefits to be gained from the intangible assets. Intangible assets can consist among others of value of business acquired, parking concessions and intellectual property. 4.7.2 Insurance liability risks Insurance liability risks refer to all insurance underwriting risks due to deviations in claims arising from uncertainty and timing of the claims as well as deviations in expenses and lapses, compared to underlying assumptions made at the point of underwriting of the policy. Life risks include mortality risk, longevity risk, disability, morbidity risk (i.e. critical illness risk), lapse and persistency risk, expense risk, catastrophe risk and revision risk. Non-life risks include reserve risk, premium risk and catastrophe risks. Reserve risk is related to outstanding claims, while premium risk is related to future claims from which catastrophe claims are excluded. Catastrophe risk is related to claims arising from catastrophic events, either natural disasters or man-made events. Each business manages insurance risks through a combination of Underwriting Policy, Product Approval Policy, Reserving Policy, Claims Management Policy and Reinsurance Policy. Particular attention is paid to ensuring that the customer segment that buys the product is consistent with the underlying assumptions made about the customers when the product was designed and priced. Underwriting policies are adopted at local level as part of the overall Enterprise Risk Management framework and are revised by actuarial staff, who examine the actual loss experience. A range of indicators and statistical analysis tools are employed to refine underwriting standards in order to improve loss experience and/or ensure pricing is adjusted appropriately. Insurance companies aim to set premiums at a level that will ensure that premiums received plus the investment income earned on them exceed total claims, costs of handling those claims and the cost of managing the business. The appropriateness of pricing is tested using a range of techniques and key performance indicators appropriate to a particular portfolio, on both a priori basis (e.g. profit testing) and a posteriori basis (e.g. embedded value, combined ratios). The factors taken into consideration when pricing insurance vary by product according to the cover and benefits offered. In general they include:  expected claims by policyholders and related expected pay-outs and their timing;  the level and nature of variability associated with the expected benefits. This includes analysis of claims statistics as well as consideration of the evolution of court rulings, the economic climate and demographic trends;  other costs of producing the relevant product, such as distribution, marketing, policy administration, and claim administration costs;  financial conditions, reflecting the time value of money;  solvency capital requirements;  target levels of profitability;  insurance market conditions, notably competitor pricing of similar products. In its exposures to the above-mentioned risks, Ageas benefits from diversification across geographical regions, product lines and even across the different insurance risk factors so that Ageas is not exposed to significant concentrations of insurance risks. Moreover, Ageas’s insurance companies have built in specific mitigation measures in order to minimise their risk exposures. Examples are, lapse supported products via lapse penalties and/or market value adjustments mitigate the loss to the insurance company and reinsurance treaties leading to limited exposure to large losses. 147 | 240 For risk monitoring Ageas considers the Solvency II Solvency Capital Requirement (SCR) per sub-risk. In the table below, the SCR for each type of Underwriting Risk is displayed, indicating the relative levels of risk and capital consumption. Composition of SCR related to insurance risk 31 December 2021 31 December 2020 Life Underwriting Risk 944 842 Health Underwriting Risk 338 331 Non-Life Underwriting Risk 875 796 4.7.2.1 Life underwriting risks The Life underwriting risk reflects the risk arising from Life insurance obligations, in relation to the perils covered and the processes used in the conduct of business. Life underwriting risks are mainly composed of mortality/longevity, disability/morbidity, lapse and persistency, life expense, revision as well as catastrophe risks. This section will first describe these risks (sub- sections A to F). It will then provide an overview of their management within Ageas operating companies (sub-section G). A. MORTALITY/LONGEVITY RISK Mortality risk is the risk of loss, or of adverse change in the value of insurance liabilities, resulting from changes in the level, trend, or volatility of mortality rates, where an increase in the mortality rate leads to an increase in the value of insurance liabilities. The mortality tables used in the pricing include prudential margins. As per industry practice, Ageas’s operating companies use the population experience tables with adequate safety loadings. Yearly review of the assumptions is necessary to compare the expected mortality of the portfolio with the experience. This analysis takes a number of criteria into account such as age, policy year, sum assured and other underwriting criteria. Longevity risk is the risk of loss, or of adverse change in the value of insurance liabilities, resulting from changes in the level, trend, or volatility of mortality rates, where a decrease in the mortality rate leads to an increase in the value of insurance liabilities. This risk is managed through yearly revision of the mortality experience within the portfolio. Where longevity is found to be rising faster than assumed in the mortality tables, additional provisions are set up and pricing of new products is adjusted accordingly. B. DISABILITY/MORBIDITY RISK Disability/morbidity risk is the risk of loss, or of adverse change in the value of insurance liabilities, resulting from changes in the level, trend or volatility of disability, sickness and morbidity rates. This can, for example, arise in the disability business, health business and workmen’s compensation. Ageas insurance companies mitigate disability risk through medical selection strategies and appropriate reinsurance cover. C. LAPSE AND PERSISTENCY RISKS Lapse risk is the risk of loss, or of adverse change in the value of insurance liabilities, resulting from changes in the level or volatility of the rates of policy lapses and persistency, which include renewals, surrenders, premium reductions and other premium reducing factors. Note that persistency risk is another name sometimes used to describe the volatility in the policy premium lapses and reinstatements of lapsed policies, free look cancellations or surrenders. When designing and pricing insurance policies, assumptions also need to be made relating to the costs of selling and then administering the policies until they lapse or mature and relating to the rate of persistency that will be experienced. The risks that in actual experience may be different from the potential impact are identified during the product development stage and can be mitigated by thorough product design. For example, the use of early redemption penalties/loyalty bonuses, initial charges or spreading the commission paid to distributors to align interests or a market value adjustment where the risks are completely born by the policyholders in case of lapse. In some markets, fiscal incentives also mitigate the lapse risk. D. LIFE-EXPENSE RISK Life-expense risk is the risk of loss, or of adverse change in the value of insurance liabilities, resulting from changes in the level, trend, or volatility of the expenses incurred in servicing insurance or reinsurance contracts. Expense risk arises if the expenses anticipated when pricing a guarantee are insufficient to cover the actual costs accruing in the following year. E. REVISION RISK Revision risk is the risk of loss, or of adverse change in the value of insurance liabilities, resulting from fluctuations in the level, trend, or volatility of the revision rates applied to annuities, due to changes in the legal environment or in the state of health of the person insured. F. CATASTROPHE RISK Life’s catastrophe risk stems from extreme or irregular events that are life threatening, for example nuclear explosion, new infectious pandemic disease, terrorism, or natural disasters. G. MANAGEMENT OF LIFE RISKS AT AGEAS INSURANCE COMPANIES Life underwriting risks are monitored via internal quarterly risk reporting in order to better understand their exposure to certain events and their evolution. Most of the Life insurance operating companies are exposed to similar events, such as (mass) lapse events, expenses or mortality/longevity. GENERAL NOTES 146 Ageas Annual Report 2021 146 | 240 An overview of expected outflows stemming from insurance liabilities (other than unit-linked) can be found below. These cash flows reflect an actuarial Best Estimate using Solvency II contract boundaries. Note that the Group aggregate liability outflows are not used for management purposes, as liquidity is managed within the individual insurance companies. Year 1 Year 2 Year 3 Year 4 Year 5 Net cash outflows from insurance liabilities as at 31 December 2021 2022 2023 2024 2025 2026 Policyholder liabilities, excluding unit-linked business, net of reinsurance 8,098 6,711 6,275 4,759 4,863 Year 1 Year 2 Year 3 Year 4 Year 5 Net cash outflows from insurance liabilities as at 31 December 2020 2021 2022 2023 2024 2025 Policyholder liabilities, excluding unit-linked business, net of reinsurance 7,243 6,559 5,891 5,720 4,233 4.7.1.4 Intangible assets risk Intangible assets risk is the risk of loss or adverse change in the value of intangible assets due to a change in expected future benefits to be gained from the intangible assets. Intangible assets can consist among others of value of business acquired, parking concessions and intellectual property. 4.7.2 Insurance liability risks Insurance liability risks refer to all insurance underwriting risks due to deviations in claims arising from uncertainty and timing of the claims as well as deviations in expenses and lapses, compared to underlying assumptions made at the point of underwriting of the policy. Life risks include mortality risk, longevity risk, disability, morbidity risk (i.e. critical illness risk), lapse and persistency risk, expense risk, catastrophe risk and revision risk. Non-life risks include reserve risk, premium risk and catastrophe risks. Reserve risk is related to outstanding claims, while premium risk is related to future claims from which catastrophe claims are excluded. Catastrophe risk is related to claims arising from catastrophic events, either natural disasters or man-made events. Each business manages insurance risks through a combination of Underwriting Policy, Product Approval Policy, Reserving Policy, Claims Management Policy and Reinsurance Policy. Particular attention is paid to ensuring that the customer segment that buys the product is consistent with the underlying assumptions made about the customers when the product was designed and priced. Underwriting policies are adopted at local level as part of the overall Enterprise Risk Management framework and are revised by actuarial staff, who examine the actual loss experience. A range of indicators and statistical analysis tools are employed to refine underwriting standards in order to improve loss experience and/or ensure pricing is adjusted appropriately. Insurance companies aim to set premiums at a level that will ensure that premiums received plus the investment income earned on them exceed total claims, costs of handling those claims and the cost of managing the business. The appropriateness of pricing is tested using a range of techniques and key performance indicators appropriate to a particular portfolio, on both a priori basis (e.g. profit testing) and a posteriori basis (e.g. embedded value, combined ratios). The factors taken into consideration when pricing insurance vary by product according to the cover and benefits offered. In general they include:  expected claims by policyholders and related expected pay-outs and their timing;  the level and nature of variability associated with the expected benefits. This includes analysis of claims statistics as well as consideration of the evolution of court rulings, the economic climate and demographic trends;  other costs of producing the relevant product, such as distribution, marketing, policy administration, and claim administration costs;  financial conditions, reflecting the time value of money;  solvency capital requirements;  target levels of profitability;  insurance market conditions, notably competitor pricing of similar products. In its exposures to the above-mentioned risks, Ageas benefits from diversification across geographical regions, product lines and even across the different insurance risk factors so that Ageas is not exposed to significant concentrations of insurance risks. Moreover, Ageas’s insurance companies have built in specific mitigation measures in order to minimise their risk exposures. Examples are, lapse supported products via lapse penalties and/or market value adjustments mitigate the loss to the insurance company and reinsurance treaties leading to limited exposure to large losses. 147 | 240 For risk monitoring Ageas considers the Solvency II Solvency Capital Requirement (SCR) per sub-risk. In the table below, the SCR for each type of Underwriting Risk is displayed, indicating the relative levels of risk and capital consumption. Composition of SCR related to insurance risk 31 December 2021 31 December 2020 Life Underwriting Risk 944 842 Health Underwriting Risk 338 331 Non-Life Underwriting Risk 875 796 4.7.2.1 Life underwriting risks The Life underwriting risk reflects the risk arising from Life insurance obligations, in relation to the perils covered and the processes used in the conduct of business. Life underwriting risks are mainly composed of mortality/longevity, disability/morbidity, lapse and persistency, life expense, revision as well as catastrophe risks. This section will first describe these risks (sub- sections A to F). It will then provide an overview of their management within Ageas operating companies (sub-section G). A. MORTALITY/LONGEVITY RISK Mortality risk is the risk of loss, or of adverse change in the value of insurance liabilities, resulting from changes in the level, trend, or volatility of mortality rates, where an increase in the mortality rate leads to an increase in the value of insurance liabilities. The mortality tables used in the pricing include prudential margins. As per industry practice, Ageas’s operating companies use the population experience tables with adequate safety loadings. Yearly review of the assumptions is necessary to compare the expected mortality of the portfolio with the experience. This analysis takes a number of criteria into account such as age, policy year, sum assured and other underwriting criteria. Longevity risk is the risk of loss, or of adverse change in the value of insurance liabilities, resulting from changes in the level, trend, or volatility of mortality rates, where a decrease in the mortality rate leads to an increase in the value of insurance liabilities. This risk is managed through yearly revision of the mortality experience within the portfolio. Where longevity is found to be rising faster than assumed in the mortality tables, additional provisions are set up and pricing of new products is adjusted accordingly. B. DISABILITY/MORBIDITY RISK Disability/morbidity risk is the risk of loss, or of adverse change in the value of insurance liabilities, resulting from changes in the level, trend or volatility of disability, sickness and morbidity rates. This can, for example, arise in the disability business, health business and workmen’s compensation. Ageas insurance companies mitigate disability risk through medical selection strategies and appropriate reinsurance cover. C. LAPSE AND PERSISTENCY RISKS Lapse risk is the risk of loss, or of adverse change in the value of insurance liabilities, resulting from changes in the level or volatility of the rates of policy lapses and persistency, which include renewals, surrenders, premium reductions and other premium reducing factors. Note that persistency risk is another name sometimes used to describe the volatility in the policy premium lapses and reinstatements of lapsed policies, free look cancellations or surrenders. When designing and pricing insurance policies, assumptions also need to be made relating to the costs of selling and then administering the policies until they lapse or mature and relating to the rate of persistency that will be experienced. The risks that in actual experience may be different from the potential impact are identified during the product development stage and can be mitigated by thorough product design. For example, the use of early redemption penalties/loyalty bonuses, initial charges or spreading the commission paid to distributors to align interests or a market value adjustment where the risks are completely born by the policyholders in case of lapse. In some markets, fiscal incentives also mitigate the lapse risk. D. LIFE-EXPENSE RISK Life-expense risk is the risk of loss, or of adverse change in the value of insurance liabilities, resulting from changes in the level, trend, or volatility of the expenses incurred in servicing insurance or reinsurance contracts. Expense risk arises if the expenses anticipated when pricing a guarantee are insufficient to cover the actual costs accruing in the following year. E. REVISION RISK Revision risk is the risk of loss, or of adverse change in the value of insurance liabilities, resulting from fluctuations in the level, trend, or volatility of the revision rates applied to annuities, due to changes in the legal environment or in the state of health of the person insured. F. CATASTROPHE RISK Life’s catastrophe risk stems from extreme or irregular events that are life threatening, for example nuclear explosion, new infectious pandemic disease, terrorism, or natural disasters. G. MANAGEMENT OF LIFE RISKS AT AGEAS INSURANCE COMPANIES Life underwriting risks are monitored via internal quarterly risk reporting in order to better understand their exposure to certain events and their evolution. Most of the Life insurance operating companies are exposed to similar events, such as (mass) lapse events, expenses or mortality/longevity. 147 Ageas Annual Report 2021 148 | 240 H. SENSITIVITIES ON TECHNICAL PROVISIONS Ageas’s main tool for monitoring the sensitivity of the life insurance liabilities to underwriting risks is the quarterly risk reporting, which contains the capital requirements by sub-risk. For consolidated entities subject to Solvency II or equivalent regimes, these capital requirements reflect the impact on Solvency II Own Funds under highly stressed underwriting assumptions (e.g. lapse rates, mortality rates, disability and morbidity rates, expenses, …) corresponding to a 1 in 200 stress. The majority of Life technical provisions at Ageas relate to Savings & Pension business. As a result, the main uncertainties to Ageas’s life insurance liabilities are related to market risks such as the level of fixed income spread levels, risk asset returns, and the term structure of interest rates, rather than underwriting risks such as lapse, mortality or expense risks. For Protection, Annuity or Health products, the relative importance of underwriting risks can be more important for individual entities, however these are not the main risks at the Group level. Based on this, Ageas does not regularly report quantitative first order sensitivities on a Group-wide basis. Instead, these risks are monitored as part of the regular risk reporting which takes an economic view. 4.7.2.2 Non-life underwriting risks Non-life underwriting risks are mainly composed of reserve, premium, catastrophe and lapse risks. This section will first describe these risks (sub-sections A to D). It will then provide an overview of their management within Ageas operating companies (sub-section E) and loss ratios (sub-section F), Non-life risk sensitivities (sub-section G) and loss reserve tables (sub-section H). A. RESERVE RISK Reserve risk is related to outstanding claims and represents the risk of adverse change in the value of insurance liabilities resulting from fluctuations in the timing and amount of claim settlements and claims expenses. B. PREMIUM RISK Non-life premium risk is the risk that the premium will not be sufficient to cover all liabilities including claims and expenses resulting from fluctuations in frequency, severity of claims, timing of claim settlements, or adverse changes in expenses. Claims losses can differ from the expected outcome for a range of reasons. Analysis of claims will generally treat differently short and long- tail claims. Short-tail claims, such as motor damage and property damage claims, are generally reported within a few days or weeks and are settled soon afterwards. The resolution of long-tail claims, such as bodily injury or liability claims, can take years to complete. In the case of long-tail claims, information concerning the event, such as medical treatment required, may, due to its very nature, not be readily obtainable. Analysis of long-tail losses is also more difficult, requires more detailed work and is subject to greater uncertainties than analysis of short-tail losses. Ageas’s insurance companies take into account experience with similar cases and historical trends, such as reserving patterns, exposure growth, loss payments, pending levels of unpaid claims, as well as court decisions and economic conditions. In the event that experience is either deemed insufficient or lacking altogether due to the specific nature of the claim event 7 , Ageas draws from reliable (external or other) sources and assessments while respecting its Risk position. To mitigate the claims risk, Ageas’s insurance companies adopt acceptance rules and underwriting policies. The pricing is defined by client segment and class of business based on knowledge or expectations of future movements in claims frequency and severity. Ageas’s insurance companies also benefits from diversification effects by engaging in a wide range of Non-life insurance classes and geographies. This does not reduce average claims, although it does significantly reduce the variation in the total claims book and therefore the risk. The risk of unexpectedly large claims is contained by policy limits, concentration risk management and reinsurance. C. CATASTROPHE RISK Catastrophe risk is related to claims generated by catastrophic events, natural disasters such as storms, floods, earthquakes, freezes, tsunamis or man-made events such as terrorist attacks, explosions or casualty claims with a lot of victims involved or with collateral impacts such as pollution or business interruption. The mitigation of the catastrophe risk is done via concentration risk management and reinsurance. D. LAPSE RISK Lapse risk is related to future premiums included in the premium provision where an expected profit is foreseen. Lapse risk is the risk that more lapses will occur than the expected ones, generating less profit than foreseen. 7 E.g. ENID (Events not in data) events. 149 | 240 E. MANAGEMENT OF NON-LIFE RISKS AT AGEAS INSURANCE COMPANIES The management of Non-life risk at Ageas follows underwriting and risk taking management instructions and guidance issued at each Non-life entity of the Group. This includes, amongst other things, risk acceptance rules, claims guidance, reinsurance taking activity and management. At Group level a number of reporting schemes related to the above are in place e.g. KPI reports and adequacy testing both on claims- and premium reserves. In addition, an internal model has been built in order to better manage the non-life underwriting risks of the entities and of the group, The model is used to find the optimal reinsurance programs to mitigate the non-life risks of the entities but also to avoid risk concentration across the Group. Weather-related claims is a typical example of concentration of risks for the group. Climate change has a particular focus in this context. For the modelling of natural events, external models are used. Ageas ensures a permanent follow-up of the implication of climate change on those models and a permanent discussion takes place with the providers of the models. F. LOSS RATIOS A loss ratio is the single measure used for assessing the appropriateness of the part of premium rates marketed to cover insurance claims. It is defined as the ratio of total claim cost (estimated) divided by premiums earned. Combined ratio is the sum of loss ratio and expense ratio (including commissions). Generally speaking one may expect to experience a combined ratio below 100 percent with a target below 96%. For reasons of intrinsic variability of the claims process and/or premium inefficiency one might from time to time observe a combined ratio above 100 percent. The latter situation is tackled in the management of the Non-life risks (see point E. above). The combined ratio and loss ratio can be found in the note 8 Segment reporting. G. SENSITIVITIES ON TECHNICAL PROVISIONS Non-life sensitivities shown in the table below assume the impact on the pre-taxation result considering a decrease in expenses, as included in the consolidated income statement, of 10%, and an increase in claims cost, as included in the consolidated income statement, of 5%. Impact on Impact on pre-taxation result at pre-taxation result at Non-life Sensitivities 31 December 2021 31 December 2020 Expenses -10% 145 123 Claims costs 5% (126) (107) H. LOSS RESERVE TABLES The reserves for claims and claim expenses that appear in the statement of financial position are analysed by the actuaries and claims management departments by accident year. Payments and loss reserves are therefore represented in a two time-related dimension table: accident year (year of loss occurrence, in the columns) and calendar year (or development year, in the rows). This so-called run-off triangle shows how loss reserve develops over time due to payments made and new estimates of the ultimate loss at the respective date of the statement of financial position. All claims concerned are resulting from insurance contracts as defined by IFRS, including all accident & health, property and casualty contracts whose reserves can be reported in a triangular format. All material figures quoted are undiscounted. Claim reserves that are held on a discounted basis with similar to life techniques (e.g. permanent disability or death annuities deriving from lines such as Workmen’s Compensation or Motor Liability) are included in the reconciliation lines. All amounts in the table are calculated at the applicable exchange rates at year-end 2021. GENERAL NOTES 148 Ageas Annual Report 2021 148 | 240 H. SENSITIVITIES ON TECHNICAL PROVISIONS Ageas’s main tool for monitoring the sensitivity of the life insurance liabilities to underwriting risks is the quarterly risk reporting, which contains the capital requirements by sub-risk. For consolidated entities subject to Solvency II or equivalent regimes, these capital requirements reflect the impact on Solvency II Own Funds under highly stressed underwriting assumptions (e.g. lapse rates, mortality rates, disability and morbidity rates, expenses, …) corresponding to a 1 in 200 stress. The majority of Life technical provisions at Ageas relate to Savings & Pension business. As a result, the main uncertainties to Ageas’s life insurance liabilities are related to market risks such as the level of fixed income spread levels, risk asset returns, and the term structure of interest rates, rather than underwriting risks such as lapse, mortality or expense risks. For Protection, Annuity or Health products, the relative importance of underwriting risks can be more important for individual entities, however these are not the main risks at the Group level. Based on this, Ageas does not regularly report quantitative first order sensitivities on a Group-wide basis. Instead, these risks are monitored as part of the regular risk reporting which takes an economic view. 4.7.2.2 Non-life underwriting risks Non-life underwriting risks are mainly composed of reserve, premium, catastrophe and lapse risks. This section will first describe these risks (sub-sections A to D). It will then provide an overview of their management within Ageas operating companies (sub-section E) and loss ratios (sub-section F), Non-life risk sensitivities (sub-section G) and loss reserve tables (sub-section H). A. RESERVE RISK Reserve risk is related to outstanding claims and represents the risk of adverse change in the value of insurance liabilities resulting from fluctuations in the timing and amount of claim settlements and claims expenses. B. PREMIUM RISK Non-life premium risk is the risk that the premium will not be sufficient to cover all liabilities including claims and expenses resulting from fluctuations in frequency, severity of claims, timing of claim settlements, or adverse changes in expenses. Claims losses can differ from the expected outcome for a range of reasons. Analysis of claims will generally treat differently short and long- tail claims. Short-tail claims, such as motor damage and property damage claims, are generally reported within a few days or weeks and are settled soon afterwards. The resolution of long-tail claims, such as bodily injury or liability claims, can take years to complete. In the case of long-tail claims, information concerning the event, such as medical treatment required, may, due to its very nature, not be readily obtainable. Analysis of long-tail losses is also more difficult, requires more detailed work and is subject to greater uncertainties than analysis of short-tail losses. Ageas’s insurance companies take into account experience with similar cases and historical trends, such as reserving patterns, exposure growth, loss payments, pending levels of unpaid claims, as well as court decisions and economic conditions. In the event that experience is either deemed insufficient or lacking altogether due to the specific nature of the claim event 7 , Ageas draws from reliable (external or other) sources and assessments while respecting its Risk position. To mitigate the claims risk, Ageas’s insurance companies adopt acceptance rules and underwriting policies. The pricing is defined by client segment and class of business based on knowledge or expectations of future movements in claims frequency and severity. Ageas’s insurance companies also benefits from diversification effects by engaging in a wide range of Non-life insurance classes and geographies. This does not reduce average claims, although it does significantly reduce the variation in the total claims book and therefore the risk. The risk of unexpectedly large claims is contained by policy limits, concentration risk management and reinsurance. C. CATASTROPHE RISK Catastrophe risk is related to claims generated by catastrophic events, natural disasters such as storms, floods, earthquakes, freezes, tsunamis or man-made events such as terrorist attacks, explosions or casualty claims with a lot of victims involved or with collateral impacts such as pollution or business interruption. The mitigation of the catastrophe risk is done via concentration risk management and reinsurance. D. LAPSE RISK Lapse risk is related to future premiums included in the premium provision where an expected profit is foreseen. Lapse risk is the risk that more lapses will occur than the expected ones, generating less profit than foreseen. 7 E.g. ENID (Events not in data) events. 149 | 240 E. MANAGEMENT OF NON-LIFE RISKS AT AGEAS INSURANCE COMPANIES The management of Non-life risk at Ageas follows underwriting and risk taking management instructions and guidance issued at each Non-life entity of the Group. This includes, amongst other things, risk acceptance rules, claims guidance, reinsurance taking activity and management. At Group level a number of reporting schemes related to the above are in place e.g. KPI reports and adequacy testing both on claims- and premium reserves. In addition, an internal model has been built in order to better manage the non-life underwriting risks of the entities and of the group, The model is used to find the optimal reinsurance programs to mitigate the non-life risks of the entities but also to avoid risk concentration across the Group. Weather-related claims is a typical example of concentration of risks for the group. Climate change has a particular focus in this context. For the modelling of natural events, external models are used. Ageas ensures a permanent follow-up of the implication of climate change on those models and a permanent discussion takes place with the providers of the models. F. LOSS RATIOS A loss ratio is the single measure used for assessing the appropriateness of the part of premium rates marketed to cover insurance claims. It is defined as the ratio of total claim cost (estimated) divided by premiums earned. Combined ratio is the sum of loss ratio and expense ratio (including commissions). Generally speaking one may expect to experience a combined ratio below 100 percent with a target below 96%. For reasons of intrinsic variability of the claims process and/or premium inefficiency one might from time to time observe a combined ratio above 100 percent. The latter situation is tackled in the management of the Non-life risks (see point E. above). The combined ratio and loss ratio can be found in the note 8 Segment reporting. G. SENSITIVITIES ON TECHNICAL PROVISIONS Non-life sensitivities shown in the table below assume the impact on the pre-taxation result considering a decrease in expenses, as included in the consolidated income statement, of 10%, and an increase in claims cost, as included in the consolidated income statement, of 5%. Impact on Impact on pre-taxation result at pre-taxation result at Non-life Sensitivities 31 December 2021 31 December 2020 Expenses -10% 145 123 Claims costs 5% (126) (107) H. LOSS RESERVE TABLES The reserves for claims and claim expenses that appear in the statement of financial position are analysed by the actuaries and claims management departments by accident year. Payments and loss reserves are therefore represented in a two time-related dimension table: accident year (year of loss occurrence, in the columns) and calendar year (or development year, in the rows). This so-called run-off triangle shows how loss reserve develops over time due to payments made and new estimates of the ultimate loss at the respective date of the statement of financial position. All claims concerned are resulting from insurance contracts as defined by IFRS, including all accident & health, property and casualty contracts whose reserves can be reported in a triangular format. All material figures quoted are undiscounted. Claim reserves that are held on a discounted basis with similar to life techniques (e.g. permanent disability or death annuities deriving from lines such as Workmen’s Compensation or Motor Liability) are included in the reconciliation lines. All amounts in the table are calculated at the applicable exchange rates at year-end 2021. 149 Ageas Annual Report 2021 150 | 240 The loss reserve development table per accident year is as follows. Accident Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Payments at: N 1,046 997 1,107 1,083 1,327 1,235 1,241 1,257 1,182 1,449 N + 1 494 503 512 522 506 520 534 498 437 N + 2 120 115 131 135 123 118 130 130 N + 3 90 75 82 103 90 94 83 N + 4 67 60 62 51 72 62 N + 5 51 31 51 48 44 N + 6 21 18 23 17 N + 7 16 18 4 N + 8 12 8 N + 9 9 Cost of claims: (Cumulative Payments + Outstanding claims reserves) N 2,102 2,082 2,184 2,176 2,618 2,384 2,369 2,418 2,224 2,645 N + 1 2,069 2,027 2,168 2,160 2,618 2,359 2,409 2,308 2,157 N + 2 2,072 1,968 2,168 2,215 2,513 2,330 2,373 2,388 N + 3 2,048 1,951 2,183 2,149 2,401 2,271 2,301 N + 4 2,070 1,984 2,144 2,098 2,386 2,263 N + 5 2,074 1,971 2,101 2,105 2,360 N + 6 2,056 1,943 2,091 2,101 N + 7 2,042 1,934 2,067 N + 8 2,041 1,929 N + 9 2,031 Ultimate loss, estimated at initial date 2,102 2,082 2,184 2,176 2,618 2,384 2,369 2,418 2,224 2,645 Ultimate loss, estimated at prior year 2,041 1,934 2,091 2,105 2,386 2,271 2,373 2,308 2,224 Ultimate loss, estimated at current year 2,031 1,929 2,067 2,101 2,360 2,263 2,301 2,388 2,157 2,645 Surplus (deficiency) current year vs initial accident year 71 153 117 75 258 121 68 30 67 Surplus (deficiency) current year vs prior year 10 5 24 4 26 8 72 (80) 67 Outstanding claims reserves prior to 2012 482 Outstanding claims reserves from 2012 to 2021 3,428 Other claims liabilities (not included in table) 2,178 Claims with regard to workers' compensation and health care 1,563 Total claims reserves in the statement of financial position 7,649 151 | 240 The loss reserve development table per accident year shows the development of the ultimate total loss (as payments made and outstanding claims reserves) for each individual accident year (as indicated in the column), for each development year (as indicated in the row) since the year of occurrence through to the reporting year 2020. The triangle related to ‘Payments‘ reports the amount of claim payments net of recoveries, gross of reinsurance. The second triangle, ‘Cost of claims’, reports the sum of cumulative payments and outstanding claims reserve including IBN(E)R for each accident year. This is gross of reinsurance. The Ultimate loss line items, estimated at the initial date of occurrence, at prior reporting year and at current reporting year, reflect the fact that the estimate fluctuates with the knowledge and information gained on the claims. The longer the period of development of the claims, the more accurate is the estimate of the ultimate loss. The amount of total claims reserves in the statement of financial position is further disclosed in section 19.4 Liabilities arising from Non-life insurance contracts. The main insurance risk event in 2021 have been the July floods, which can be considered as the largest natural catastrophe in the recent history of Belgium. Their total cost at the level of the Belgian market is estimated to exceed 2 billion. These amounts go well beyond the limit for flood coverage foreseen in the Belgian law since 2006, which is currently EUR 350 million aggregated at the level of the Belgian market. Current estimates of the return period of this event vary, but external scientific studies mention a return period of 400 years. Note however that this return period can be significantly influenced by climate change. Given the exceptional nature of the event, the Belgian insurance companies and the regional governments reached an agreement, in which the insurance companies increased their intervention to twice the legal limit and the regional governments agreed to cover the excess costs up to a certain amount. Moreover the cost to be compensated by the regions is prefinanced by the insurers via a loan to the Walloon region and via a quarterly settlement for the other two regions. At the end of the year this loan to the Walloon region amounted to EUR 103.5 million. Note that if the total claims cost goes beyond the amount mentioned in the agreement further negotiations will take place, meaning that at closing date there still persists an uncertainty on how the charges related to these excess claims will be shared. 4.7.2.3 Health Risk Health underwriting risk reflects the risk arising from the underwriting of health insurance obligations, whether it is pursued on a similar technical basis to that of life insurance or not, following from both the perils covered and the processes used in the conduct of business. The components of health insurance risk are to split depending on the type of liabilities: if similar to life risk or modelled based on similar techniques as for life liabilities – please refer to section 4.7.2.1 Life underwriting risks. For liabilities similar to Non-life liabilities or modelled on a similar way, please refer to section 4.7.2.2 Non-life underwriting risks. 4.7.3 Operational risks Operational risk is defined as the risk of losses arising from inadequate or failed internal processes, personnel, systems, or external events. Ageas views operational risk as an ‘umbrella’ risk, encompassing a number of sub-risks: Employment Practices and Workplace Safety, Execution, Delivery and Process Management, Technology, Internal Fraud, External Fraud, Damage to Physical Assets (including physical security), Clients, Products Business & Legal Practice, Conduct, Regulatory Compliance, Third Party, Statutory Reporting, Disclosure & Tax, Business Continuity, Crisis Management & Operational Resilience, Data Management, Information Security (including Cyber), and Model risk. In order to ensure adequate management of operational risks, Ageas has implemented Group-wide policies and processes, which covers topics, amongst others, that include:  Business Continuity Management;  Fraud Risk Management;  Information Security;  Data Management;  Outsourcing & Procurement;  Treat Your Customer Fairly;  Incident Management and Loss Data Collection;  Internal Control Adequacy Assessment;  Key Risk Identification and Reporting process. Ageas’s operational risk mitigating strategy is to minimise operational failures or disruption, whether caused by internal or external factors which may damage our reputation and/or incur financial losses via a strong and robust Internal Control System (ICS). Risk awareness training and education initiatives are part of Ageas entities’ activities since they are vital to ensure that employees have an adequate understanding of their roles and responsibilities towards risk management. Ageas applies the standard formula to calculate operational risk capital. Ageas has also implemented a scenario-based approach which uses expert judgement, internal and external data. The estimated frequency and severity are translated into the most likely potential loss and the worst case potential loss for each operational risk scenario. The scenario outputs are used to determine whether or not the operational risk capital based on standard formula is sufficient to cover our key operational risks. One of the top operational risks faced by Ageas Group in 2021 has remained information security risk (including cyber and data protection). Further details are provided in section 4.6. GENERAL NOTES 150 Ageas Annual Report 2021 150 | 240 The loss reserve development table per accident year is as follows. Accident Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Payments at: N 1,046 997 1,107 1,083 1,327 1,235 1,241 1,257 1,182 1,449 N + 1 494 503 512 522 506 520 534 498 437 N + 2 120 115 131 135 123 118 130 130 N + 3 90 75 82 103 90 94 83 N + 4 67 60 62 51 72 62 N + 5 51 31 51 48 44 N + 6 21 18 23 17 N + 7 16 18 4 N + 8 12 8 N + 9 9 Cost of claims: (Cumulative Payments + Outstanding claims reserves) N 2,102 2,082 2,184 2,176 2,618 2,384 2,369 2,418 2,224 2,645 N + 1 2,069 2,027 2,168 2,160 2,618 2,359 2,409 2,308 2,157 N + 2 2,072 1,968 2,168 2,215 2,513 2,330 2,373 2,388 N + 3 2,048 1,951 2,183 2,149 2,401 2,271 2,301 N + 4 2,070 1,984 2,144 2,098 2,386 2,263 N + 5 2,074 1,971 2,101 2,105 2,360 N + 6 2,056 1,943 2,091 2,101 N + 7 2,042 1,934 2,067 N + 8 2,041 1,929 N + 9 2,031 Ultimate loss, estimated at initial date 2,102 2,082 2,184 2,176 2,618 2,384 2,369 2,418 2,224 2,645 Ultimate loss, estimated at prior year 2,041 1,934 2,091 2,105 2,386 2,271 2,373 2,308 2,224 Ultimate loss, estimated at current year 2,031 1,929 2,067 2,101 2,360 2,263 2,301 2,388 2,157 2,645 Surplus (deficiency) current year vs initial accident year 71 153 117 75 258 121 68 30 67 Surplus (deficiency) current year vs prior year 10 5 24 4 26 8 72 (80) 67 Outstanding claims reserves prior to 2012 482 Outstanding claims reserves from 2012 to 2021 3,428 Other claims liabilities (not included in table) 2,178 Claims with regard to workers' compensation and health care 1,563 Total claims reserves in the statement of financial position 7,649 151 | 240 The loss reserve development table per accident year shows the development of the ultimate total loss (as payments made and outstanding claims reserves) for each individual accident year (as indicated in the column), for each development year (as indicated in the row) since the year of occurrence through to the reporting year 2020. The triangle related to ‘Payments‘ reports the amount of claim payments net of recoveries, gross of reinsurance. The second triangle, ‘Cost of claims’, reports the sum of cumulative payments and outstanding claims reserve including IBN(E)R for each accident year. This is gross of reinsurance. The Ultimate loss line items, estimated at the initial date of occurrence, at prior reporting year and at current reporting year, reflect the fact that the estimate fluctuates with the knowledge and information gained on the claims. The longer the period of development of the claims, the more accurate is the estimate of the ultimate loss. The amount of total claims reserves in the statement of financial position is further disclosed in section 19.4 Liabilities arising from Non-life insurance contracts. The main insurance risk event in 2021 have been the July floods, which can be considered as the largest natural catastrophe in the recent history of Belgium. Their total cost at the level of the Belgian market is estimated to exceed 2 billion. These amounts go well beyond the limit for flood coverage foreseen in the Belgian law since 2006, which is currently EUR 350 million aggregated at the level of the Belgian market. Current estimates of the return period of this event vary, but external scientific studies mention a return period of 400 years. Note however that this return period can be significantly influenced by climate change. Given the exceptional nature of the event, the Belgian insurance companies and the regional governments reached an agreement, in which the insurance companies increased their intervention to twice the legal limit and the regional governments agreed to cover the excess costs up to a certain amount. Moreover the cost to be compensated by the regions is prefinanced by the insurers via a loan to the Walloon region and via a quarterly settlement for the other two regions. At the end of the year this loan to the Walloon region amounted to EUR 103.5 million. Note that if the total claims cost goes beyond the amount mentioned in the agreement further negotiations will take place, meaning that at closing date there still persists an uncertainty on how the charges related to these excess claims will be shared. 4.7.2.3 Health Risk Health underwriting risk reflects the risk arising from the underwriting of health insurance obligations, whether it is pursued on a similar technical basis to that of life insurance or not, following from both the perils covered and the processes used in the conduct of business. The components of health insurance risk are to split depending on the type of liabilities: if similar to life risk or modelled based on similar techniques as for life liabilities – please refer to section 4.7.2.1 Life underwriting risks. For liabilities similar to Non-life liabilities or modelled on a similar way, please refer to section 4.7.2.2 Non-life underwriting risks. 4.7.3 Operational risks Operational risk is defined as the risk of losses arising from inadequate or failed internal processes, personnel, systems, or external events. Ageas views operational risk as an ‘umbrella’ risk, encompassing a number of sub-risks: Employment Practices and Workplace Safety, Execution, Delivery and Process Management, Technology, Internal Fraud, External Fraud, Damage to Physical Assets (including physical security), Clients, Products Business & Legal Practice, Conduct, Regulatory Compliance, Third Party, Statutory Reporting, Disclosure & Tax, Business Continuity, Crisis Management & Operational Resilience, Data Management, Information Security (including Cyber), and Model risk. In order to ensure adequate management of operational risks, Ageas has implemented Group-wide policies and processes, which covers topics, amongst others, that include:  Business Continuity Management;  Fraud Risk Management;  Information Security;  Data Management;  Outsourcing & Procurement;  Treat Your Customer Fairly;  Incident Management and Loss Data Collection;  Internal Control Adequacy Assessment;  Key Risk Identification and Reporting process. Ageas’s operational risk mitigating strategy is to minimise operational failures or disruption, whether caused by internal or external factors which may damage our reputation and/or incur financial losses via a strong and robust Internal Control System (ICS). Risk awareness training and education initiatives are part of Ageas entities’ activities since they are vital to ensure that employees have an adequate understanding of their roles and responsibilities towards risk management. Ageas applies the standard formula to calculate operational risk capital. Ageas has also implemented a scenario-based approach which uses expert judgement, internal and external data. The estimated frequency and severity are translated into the most likely potential loss and the worst case potential loss for each operational risk scenario. The scenario outputs are used to determine whether or not the operational risk capital based on standard formula is sufficient to cover our key operational risks. One of the top operational risks faced by Ageas Group in 2021 has remained information security risk (including cyber and data protection). Further details are provided in section 4.6. 151 Ageas Annual Report 2021 152 | 240 4.7.4 Strategic & Business risks This risk category covers external and internal factors that can impact Ageas’s ability to meet its current business plan and objectives and also to position itself for achieving ongoing growth and value creation. Two of the top strategic and business risks faced by Ageas Group in 2021 were Interest Rate Risk: prolonged low interest rate / sudden rise of interest rate combined with mass lapses, and higher inflation risk. Further details are provided in section 4.6. 4.7.4.1 Strategic risk Risks to the organisation arising from unclear understanding and translation of the strategy, inadequately determined levels of uncertainty (risk) associated to the strategy, and/or challenges faced during implementation stages. It includes:  Business Model Risk: risk to the organisation arising from our business model (and that has an influence on the business decisions that we make).  Partnership Risk: risk to the organisation arising from partnerships, dependence on partner-related distribution channels, limited operational control inherent for joint ventures, the offering of insurance services as part of a broader ‘partnership eco-system’ (e.g. coupling insurance products with service providers such as Amazon, utility players in the connected home space…). Ageas Group has a strong strategic risk management framework to anticipate, report on, and mitigate these risks. The ORSA report provides an assessment on the overall adequacy of solvency for the 3 year budgeted period (Multi-Year Budget or MYB), which comprises strategic risks. 4.7.4.2 Change risk Risks to the organisation arising from managing change (e.g. programmes and projects) or an inability to adapt sufficiently quickly to industry and market changes (e.g. regulations and products). 4.7.4.3 Industry risk Risks arising from internal and/or external environmental factors, such as:  Macro-economic arising from economic factors (e.g. inflation, deflation, unemployment, changing consumer confidence / behaviour…) that can impact the business. Interest rates / Inflation / deflation can also materialise through financial and/or insurance risks;  Geopolitical that may impact our ability to maintain / develop business in different countries where we operate / intend to operate;  Propensity / Changing client behaviours;  Innovation from internal (own insurance services & products launched…) and external (e.g. blockchain, self-driving cars…) factors;  Competition risks arising from changes within the competitor landscape or market position. 4.7.4.4 Systemic risk The risk of disruption to financial services organisations that has the potential to have serious consequences for the financial system and/or the real economy. Systemic risk events can originate in, propagate through, or remain outside of Ageas. 4.7.4.5 Sustainability risk A sustainability risk is an uncertain environmental, social or governance (ESG) event that, if it occurs, can cause a significant negative impact on Ageas. It includes the opportunities that may be available to Ageas because of changing environmental or social factors. Environmental relates to the quality and functioning of the natural environment and natural systems, and our positive contribution towards it. Social relates to the rights, well-being and interests of people and communities. Governance relates to elements such as Board structure, size, Executive pay, shareholder rights, stakeholder interaction… The impacts of ESG risks are considered & reported along two axis:  Physical Risk (risks that arise from the physical effects of climate change) – assess the impact on the business due to physical risks materialising (e.g. damage to real estate portfolio, people well- being due to prolonged confinements / rapid changes in work culture, technology…).  Transition risk – (risks that arise from the transition to a low-carbon and climate-resilient economy) – assess the impact on the business due to the transition measures taken / being deployed towards an ESG supported economy. Sustainability risks are part of the risk taxonomy, and risks are considered through the risk in execution cycle within the Ageas Key Risk Reporting (KRR) and Emerging Risk Reporting Processes. Additionally, climate change stress tests were performed in the 2021 ORSA. 153 | 240 4.7.5 Reinsurance Where appropriate, Ageas’s insurance companies enter into reinsurance contracts to limit their exposure to underwriting losses. This reinsurance may be on a policy-by-policy basis (per risk), or on a portfolio basis (per event). The latter events are mostly weather related (e.g. hurricanes, earthquakes and floods) or man-made, multiple claims triggered by a single event. Reinsurance companies are selected based primarily on pricing and counterparty default risk considerations. The management of counterparty default risk is integrated into the overall management of credit risk. Ageas incorporated an internal reinsurer Intreas N.V. and obtained in June 2015 a licence in the Netherlands. In 2018, Ageas obtained a life and non-life licence for ageas SA/NV in Belgium. Business of Intreas N.V. was fully transferred to ageas SA/NV in the course of 2019 and Intreas N.V. was liquidated. The rationale of obtaining a licence for ageas SA/NV is to optimise the Ageas Group reinsurance programme by harmonising risk profiles among controlled limits/entities and to improve capital fungibility. The companies within the scope of internal reinsurance are:  AG Insurance, Belgium;  Ageas Insurance Limited, UK;  Ageas Ocidental, Portugal;  Ageas Seguros Non-Life, Portugal;  Medis, Portugal;  Ageas France;  Specific NCPs (non-controlled participations), e.g. Thailand, Turkey and India. In line with its Risk Appetite, ageas SA/NV mitigates part of its risk on the assumed business through the acquisition of group retrocession covers and/or covers protecting its own balance sheet. ageas SA/NV also underwrites proportional treaties, covering a share of the non-life business of the controlled participations. Since the transfer of the business from Intreas to ageas SA/NV, the governance was adapted in order to respect and operate within the Ageas Risk Management Framework and to set up control on processes following Group standards. The table below provides details of risk retention by product line of Ageas (in EUR mio). Probable Maximum Loss Probable Maximum Loss 2021 per risk per event Product Motor, Third Party liability 4 4 Terrorism 4 43 Property 4 99 General Third Party Liability 4 7 Workmen’s Compensation 3 3 Personal Accident 3 3 The table shows the highest amount (capped at a 200 years return period) per risk across all entities of the Group for similar covers for which Ageas Group assumes responsibility for mitigating emerging risks; any amount higher than those in the table will be transferred to third party reinsurers for cover. The measurement depends on the type of event covered by these reinsurance agreements: either per single risk or alternatively per event. Additionally, as the catastrophe covers for Motor Hull have been integrated into the property reinsurance treaty, the retention mentioned is the maximum that Ageas Group is exposed to. For retention per event, we take into account the maximum combined exposure of AIL, AGI and ageas SA/NV held in retention. The premiums ceded to reinsurers by product line are presented in Note 30 “Insurance premiums”. GENERAL NOTES 152 Ageas Annual Report 2021 152 | 240 4.7.4 Strategic & Business risks This risk category covers external and internal factors that can impact Ageas’s ability to meet its current business plan and objectives and also to position itself for achieving ongoing growth and value creation. Two of the top strategic and business risks faced by Ageas Group in 2021 were Interest Rate Risk: prolonged low interest rate / sudden rise of interest rate combined with mass lapses, and higher inflation risk. Further details are provided in section 4.6. 4.7.4.1 Strategic risk Risks to the organisation arising from unclear understanding and translation of the strategy, inadequately determined levels of uncertainty (risk) associated to the strategy, and/or challenges faced during implementation stages. It includes:  Business Model Risk: risk to the organisation arising from our business model (and that has an influence on the business decisions that we make).  Partnership Risk: risk to the organisation arising from partnerships, dependence on partner-related distribution channels, limited operational control inherent for joint ventures, the offering of insurance services as part of a broader ‘partnership eco-system’ (e.g. coupling insurance products with service providers such as Amazon, utility players in the connected home space…). Ageas Group has a strong strategic risk management framework to anticipate, report on, and mitigate these risks. The ORSA report provides an assessment on the overall adequacy of solvency for the 3 year budgeted period (Multi-Year Budget or MYB), which comprises strategic risks. 4.7.4.2 Change risk Risks to the organisation arising from managing change (e.g. programmes and projects) or an inability to adapt sufficiently quickly to industry and market changes (e.g. regulations and products). 4.7.4.3 Industry risk Risks arising from internal and/or external environmental factors, such as:  Macro-economic arising from economic factors (e.g. inflation, deflation, unemployment, changing consumer confidence / behaviour…) that can impact the business. Interest rates / Inflation / deflation can also materialise through financial and/or insurance risks;  Geopolitical that may impact our ability to maintain / develop business in different countries where we operate / intend to operate;  Propensity / Changing client behaviours;  Innovation from internal (own insurance services & products launched…) and external (e.g. blockchain, self-driving cars…) factors;  Competition risks arising from changes within the competitor landscape or market position. 4.7.4.4 Systemic risk The risk of disruption to financial services organisations that has the potential to have serious consequences for the financial system and/or the real economy. Systemic risk events can originate in, propagate through, or remain outside of Ageas. 4.7.4.5 Sustainability risk A sustainability risk is an uncertain environmental, social or governance (ESG) event that, if it occurs, can cause a significant negative impact on Ageas. It includes the opportunities that may be available to Ageas because of changing environmental or social factors. Environmental relates to the quality and functioning of the natural environment and natural systems, and our positive contribution towards it. Social relates to the rights, well-being and interests of people and communities. Governance relates to elements such as Board structure, size, Executive pay, shareholder rights, stakeholder interaction… The impacts of ESG risks are considered & reported along two axis:  Physical Risk (risks that arise from the physical effects of climate change) – assess the impact on the business due to physical risks materialising (e.g. damage to real estate portfolio, people well- being due to prolonged confinements / rapid changes in work culture, technology…).  Transition risk – (risks that arise from the transition to a low-carbon and climate-resilient economy) – assess the impact on the business due to the transition measures taken / being deployed towards an ESG supported economy. Sustainability risks are part of the risk taxonomy, and risks are considered through the risk in execution cycle within the Ageas Key Risk Reporting (KRR) and Emerging Risk Reporting Processes. Additionally, climate change stress tests were performed in the 2021 ORSA. 153 | 240 4.7.5 Reinsurance Where appropriate, Ageas’s insurance companies enter into reinsurance contracts to limit their exposure to underwriting losses. This reinsurance may be on a policy-by-policy basis (per risk), or on a portfolio basis (per event). The latter events are mostly weather related (e.g. hurricanes, earthquakes and floods) or man-made, multiple claims triggered by a single event. Reinsurance companies are selected based primarily on pricing and counterparty default risk considerations. The management of counterparty default risk is integrated into the overall management of credit risk. Ageas incorporated an internal reinsurer Intreas N.V. and obtained in June 2015 a licence in the Netherlands. In 2018, Ageas obtained a life and non-life licence for ageas SA/NV in Belgium. Business of Intreas N.V. was fully transferred to ageas SA/NV in the course of 2019 and Intreas N.V. was liquidated. The rationale of obtaining a licence for ageas SA/NV is to optimise the Ageas Group reinsurance programme by harmonising risk profiles among controlled limits/entities and to improve capital fungibility. The companies within the scope of internal reinsurance are:  AG Insurance, Belgium;  Ageas Insurance Limited, UK;  Ageas Ocidental, Portugal;  Ageas Seguros Non-Life, Portugal;  Medis, Portugal;  Ageas France;  Specific NCPs (non-controlled participations), e.g. Thailand, Turkey and India. In line with its Risk Appetite, ageas SA/NV mitigates part of its risk on the assumed business through the acquisition of group retrocession covers and/or covers protecting its own balance sheet. ageas SA/NV also underwrites proportional treaties, covering a share of the non-life business of the controlled participations. Since the transfer of the business from Intreas to ageas SA/NV, the governance was adapted in order to respect and operate within the Ageas Risk Management Framework and to set up control on processes following Group standards. The table below provides details of risk retention by product line of Ageas (in EUR mio). Probable Maximum Loss Probable Maximum Loss 2021 per risk per event Product Motor, Third Party liability 4 4 Terrorism 4 43 Property 4 99 General Third Party Liability 4 7 Workmen’s Compensation 3 3 Personal Accident 3 3 The table shows the highest amount (capped at a 200 years return period) per risk across all entities of the Group for similar covers for which Ageas Group assumes responsibility for mitigating emerging risks; any amount higher than those in the table will be transferred to third party reinsurers for cover. The measurement depends on the type of event covered by these reinsurance agreements: either per single risk or alternatively per event. Additionally, as the catastrophe covers for Motor Hull have been integrated into the property reinsurance treaty, the retention mentioned is the maximum that Ageas Group is exposed to. For retention per event, we take into account the maximum combined exposure of AIL, AGI and ageas SA/NV held in retention. The premiums ceded to reinsurers by product line are presented in Note 30 “Insurance premiums”. 153 Ageas Annual Report 2021 154 | 240 ageas SA/NV is the ultimate parent of the Ageas Group. The National Bank of Belgium (NBB) had designated ageas SA/NV as an Insurance Holding. In June 2018, the NBB has granted ageas SA/NV a license to underwrite life and non-life reinsurance activities. The NBB is the group supervisory authority and in that capacity receives specific reports which form the basis of prudential supervision at group level. In its role as group supervisory authority the NBB facilitates group supervision via a college of supervisors. Supervisors in the EEA member countries where Ageas is active are represented in this college. The college, operating on the basis of European regulations, ensures that the collaboration, exchange of information and mutual consultation between the supervisory authorities takes place and furthermore promotes convergence of supervisory activities. 5.1 Requirements and available capital under Solvency II - Partial Internal Model (Pillar 1) Since 1 January 2016, Ageas is supervised on a consolidated level based on the Solvency II framework, applying a Partial Internal Model (PIM) for pillar 1 reporting, where the main part of the Non-life risks are modelled according to Ageas specific formulas, instead of the standard formula approach. For fully consolidated entities, the consolidation scope for Solvency II is comparable to the IFRS consolidation scope, with the exception of Interparking, which is proportionally consolidated in Solvency II and fully consolidated in IFRS. The European equity associates are included pro rata, without any diversification benefits, while non-European equity associates are excluded from own funds and required solvency, as the applicable solvency regimes are deemed non-equivalent with Solvency II. After Tesco Underwriting’s disposal in Q2 2021, Ageas has no European equity associate included pro rata. In Q4 2021, AgeSA, the Turkish equity associate purchased in May 2021, entered the scope of group Solvency II calculations. AgeSA provides Ageas with Solvency II calculations that are included pro rata, without any diversification. In the Partial Internal Model (PIM), Ageas applies transitional measures relating to technical provisions in Portugal and France and the grandfathering of issued hybrid debt. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 5 Regulatory supervision and solvency 155 | 240 The reconciliation of the IFRS Equity to the Eligible Own Funds under Solvency II and the resulting solvency ratio according to the Partial Internal Model approach is as follows. 31 December 2021 31 December 2020 IFRS Equity 14,172 13,774 Shareholders' equity 11,914 11,555 Non-controlling interest 2,258 2,219 Qualifying Subordinated Liabilities 2,807 2,936 Scope changes at IFRS value (5,646) (5,326) Exclusion of expected dividend (495) (485) Proportional consolidation (295) (296) Derecognition of Equity Associates (4,856) (4,545) Valuation differences - (unaudited) (2,348) (2,472) Revaluation of Property Investments 1,783 1,667 Derecognition of parking concessions (407) (360) Derecognition of goodwill (610) (596) Revaluation of Insurance related balance sheet items - (unaudited) (Technical Provisions, Reinsurance Recoverables, VOBA and DAC) (7,036) (8,137) Revaluation of assets which, under IFRS are not accounted for at fair value (Held to Maturity Bonds, Loans, Mortgages) 3,384 4,442 Tax impact on valuation differences 521 617 Other 17 (106) Total Solvency II Own Funds - (unaudited) 8,985 8,912 Non Transferable Own Funds (1,029) (1,043) Total Eligible Solvency II Own Funds - (unaudited) 7,956 7,869 Group Required Capital under Partial Internal Model (SCR) - (unaudited) 4,226 3,962 Capital Ratio 188.3% 198.6% 31 December 2021 31 December 2020 Total Eligible Solvency II Own Funds, of which - (unaudited): 7,956 7,869 Tier 1 5,205 5,048 Tier 1 restricted 1,164 1,205 Tier 2 1,524 1,537 Tier 3 63 79 Own Funds increased from EUR 7,869 million at Q4 2020 to EUR 7,956 million at Q4 2021 explained by the dividend payment of participations in Asia not included in SII, the operational performance of the insurance business and favourable financial market movements (interest rates and equities, largely offset by inflation). Own funds were also impacted by the Share Buy Back and the expected outgoing dividends. Non-transferable Own Funds relate to third party interests. GENERAL NOTES 154 Ageas Annual Report 2021 Regulatory supervision and solvency 154 | 240 ageas SA/NV is the ultimate parent of the Ageas Group. The National Bank of Belgium (NBB) had designated ageas SA/NV as an Insurance Holding. In June 2018, the NBB has granted ageas SA/NV a license to underwrite life and non-life reinsurance activities. The NBB is the group supervisory authority and in that capacity receives specific reports which form the basis of prudential supervision at group level. In its role as group supervisory authority the NBB facilitates group supervision via a college of supervisors. Supervisors in the EEA member countries where Ageas is active are represented in this college. The college, operating on the basis of European regulations, ensures that the collaboration, exchange of information and mutual consultation between the supervisory authorities takes place and furthermore promotes convergence of supervisory activities. 5.1 Requirements and available capital under Solvency II - Partial Internal Model (Pillar 1) Since 1 January 2016, Ageas is supervised on a consolidated level based on the Solvency II framework, applying a Partial Internal Model (PIM) for pillar 1 reporting, where the main part of the Non-life risks are modelled according to Ageas specific formulas, instead of the standard formula approach. For fully consolidated entities, the consolidation scope for Solvency II is comparable to the IFRS consolidation scope, with the exception of Interparking, which is proportionally consolidated in Solvency II and fully consolidated in IFRS. The European equity associates are included pro rata, without any diversification benefits, while non-European equity associates are excluded from own funds and required solvency, as the applicable solvency regimes are deemed non-equivalent with Solvency II. After Tesco Underwriting’s disposal in Q2 2021, Ageas has no European equity associate included pro rata. In Q4 2021, AgeSA, the Turkish equity associate purchased in May 2021, entered the scope of group Solvency II calculations. AgeSA provides Ageas with Solvency II calculations that are included pro rata, without any diversification. In the Partial Internal Model (PIM), Ageas applies transitional measures relating to technical provisions in Portugal and France and the grandfathering of issued hybrid debt. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 5 Regulatory supervision and solvency 155 | 240 The reconciliation of the IFRS Equity to the Eligible Own Funds under Solvency II and the resulting solvency ratio according to the Partial Internal Model approach is as follows. 31 December 2021 31 December 2020 IFRS Equity 14,172 13,774 Shareholders' equity 11,914 11,555 Non-controlling interest 2,258 2,219 Qualifying Subordinated Liabilities 2,807 2,936 Scope changes at IFRS value (5,646) (5,326) Exclusion of expected dividend (495) (485) Proportional consolidation (295) (296) Derecognition of Equity Associates (4,856) (4,545) Valuation differences - (unaudited) (2,348) (2,472) Revaluation of Property Investments 1,783 1,667 Derecognition of parking concessions (407) (360) Derecognition of goodwill (610) (596) Revaluation of Insurance related balance sheet items - (unaudited) (Technical Provisions, Reinsurance Recoverables, VOBA and DAC) (7,036) (8,137) Revaluation of assets which, under IFRS are not accounted for at fair value (Held to Maturity Bonds, Loans, Mortgages) 3,384 4,442 Tax impact on valuation differences 521 617 Other 17 (106) Total Solvency II Own Funds - (unaudited) 8,985 8,912 Non Transferable Own Funds (1,029) (1,043) Total Eligible Solvency II Own Funds - (unaudited) 7,956 7,869 Group Required Capital under Partial Internal Model (SCR) - (unaudited) 4,226 3,962 Capital Ratio 188.3% 198.6% 31 December 2021 31 December 2020 Total Eligible Solvency II Own Funds, of which - (unaudited): 7,956 7,869 Tier 1 5,205 5,048 Tier 1 restricted 1,164 1,205 Tier 2 1,524 1,537 Tier 3 63 79 Own Funds increased from EUR 7,869 million at Q4 2020 to EUR 7,956 million at Q4 2021 explained by the dividend payment of participations in Asia not included in SII, the operational performance of the insurance business and favourable financial market movements (interest rates and equities, largely offset by inflation). Own funds were also impacted by the Share Buy Back and the expected outgoing dividends. Non-transferable Own Funds relate to third party interests. 155 Ageas Annual Report 2021 156 | 240 The composition of the capital solvency requirements can be summarised as follows: 31 December 2021 31 December 2020 Market Risk 5,000 4,648 Counterparty Default Risk 323 325 Life Underwriting Risk 944 842 Health Underwriting Risk 338 331 Non-Life Underwriting Risk 875 796 Diversification between above mentioned risks (1,673) (1,549) Non Diversifiable Risks 552 537 Loss-Absorption through Technical Provisions (1,378) (1,193) Loss-Absorption through Deferred Taxes (755) (774) Group Required Capital under Partial Internal Model (SCR) - (unaudited) 4,226 3,962 Impact of Non-Life Internal Model on Non-Life Underwriting Risk 226 245 Impact of Non-Life Internal Model on Diversification and other risks (117) (122) Impact of Non-Life Internal Model on Loss-Absorption through Deferred Taxes 12 8 Group Required Capital under the SII Standard Formula - (unaudited) 4,347 4,093 5.2 Ageas capital management under Solvency II – SCR ageas (Pillar 2 - unaudited) Ageas considers a strong capital base at the individual insurance operations a necessity, on the one hand as a competitive advantage and on the other as being necessary to fund the planned growth. For its capital management Ageas uses an internal approach based on the Partial Internal Model with an adjusted spread risk, applying an Internal Model for Real Estate (as from 2016), the removal of transitional measures (with the exception of the grandfathering of issued hybrid debt and the extension of reporting deadlines) and an adjustment for the fair valuation of IAS19 reserves. In this adjustment, spread risk is calculated on the fundamental part of the spread risk for all bonds. This introduces an SCR charge for EU- and high rated government bonds and decreases the spread risk charge for all other bonds. Technical provisions are net present valued using an interest curve as prescribed by EIOPA, but instead of using the standard volatility adjustment, the companies apply a company specific volatility adjustment or use an expected loss model, based on the composition of their specific asset portfolio. This SCR is called the SCR ageas . 157 | 240 The SCR ageas can be reconciled to the SCR Partial Internal Model as follows: 31 December 2021 31 December 2020 Group Partial Internal Model SCR 4,226 3,962 Exclude impact General Account (101) (71) Insurance Partial Internal Model SCR 4,125 3,891 Impact of Real Estate Internal Model (184) (271) Additional Spread Risk 252 623 Less Diversification (13) 11 Less adjustment Technical Provision (156) (80) Less Deferred Tax Loss Mitigation 9 (72) Insurance SCR ageas 4,033 4,103 31 December 2021 31 December 2020 Group Eligible Solvency II Own Funds under Partial Internal Model 7,956 7,869 Exclusion of General Account (204) (289) Revaluation of Technical Provision (112) (221) Recognition of Parking Concessions 399 362 Recalculation of Non Transferable (107) 40 Group Eligible Solvency II ageas Own Funds 7,932 7,761 Insurance SCR ageas decreased from EUR 4,103 million at Q4 2020 to EUR 4,033 million at Q4 2021 mainly explained by the following drivers:  Market risk increased due to new investments in equity and property risks mainly offset by a credit model change introduced in Belgium in Q4 2021. The re-risking demonstrates the ongoing search for yield, but is applied withing the predefined risk appetite limits.  Life and non-life underwriting risks increased mainly due to higher lapse, expense and catastrophe risks.  These increases were more than offset by the increase in the Loss Absorbing Capacity of Technical Provisions. Since 2021, the Loss Absorbing Capacity of Technical Provisions includes the overflow account. This overflow account was introduced in the modelling framework to better reflect how the financial result is managed in going concern. The previous model realized capital gains and losses in a way consistent with Solvency II contract boundaries (run-off view), which gave a distorted view of the future financial margin realized in going concern. The increase in SCR due to the addition of AgeSA was partially offset by the decrease in SCR after the disposal of Tesco Underwriting. 31 December 2021 31 December 2020 Solvency Solvency Own Funds SCR Ratio Own Funds SCR Ratio Belgium 6,116 2,884 212.1% 5,882 3,019 194.8% UK 751 431 174.2% 840 463 181.5% Continental Europe 1,172 728 161.0% 1,051 634 165.8% Reinsurance 905 405 223.3% 832 407 204.4% General Account including elimination and diversification 904 211 1,035 161 Non-transferable own funds / Diversification (1,713) (531) (1,583) (513) Total Ageas 8,135 4,128 197.1% 8,057 4,171 193.2% The Target capital ratio is set at 175% based on SCR ageas . GENERAL NOTES 156 Ageas Annual Report 2021 156 | 240 The composition of the capital solvency requirements can be summarised as follows: 31 December 2021 31 December 2020 Market Risk 5,000 4,648 Counterparty Default Risk 323 325 Life Underwriting Risk 944 842 Health Underwriting Risk 338 331 Non-Life Underwriting Risk 875 796 Diversification between above mentioned risks (1,673) (1,549) Non Diversifiable Risks 552 537 Loss-Absorption through Technical Provisions (1,378) (1,193) Loss-Absorption through Deferred Taxes (755) (774) Group Required Capital under Partial Internal Model (SCR) - (unaudited) 4,226 3,962 Impact of Non-Life Internal Model on Non-Life Underwriting Risk 226 245 Impact of Non-Life Internal Model on Diversification and other risks (117) (122) Impact of Non-Life Internal Model on Loss-Absorption through Deferred Taxes 12 8 Group Required Capital under the SII Standard Formula - (unaudited) 4,347 4,093 5.2 Ageas capital management under Solvency II – SCR ageas (Pillar 2 - unaudited) Ageas considers a strong capital base at the individual insurance operations a necessity, on the one hand as a competitive advantage and on the other as being necessary to fund the planned growth. For its capital management Ageas uses an internal approach based on the Partial Internal Model with an adjusted spread risk, applying an Internal Model for Real Estate (as from 2016), the removal of transitional measures (with the exception of the grandfathering of issued hybrid debt and the extension of reporting deadlines) and an adjustment for the fair valuation of IAS19 reserves. In this adjustment, spread risk is calculated on the fundamental part of the spread risk for all bonds. This introduces an SCR charge for EU- and high rated government bonds and decreases the spread risk charge for all other bonds. Technical provisions are net present valued using an interest curve as prescribed by EIOPA, but instead of using the standard volatility adjustment, the companies apply a company specific volatility adjustment or use an expected loss model, based on the composition of their specific asset portfolio. This SCR is called the SCR ageas . 157 | 240 The SCR ageas can be reconciled to the SCR Partial Internal Model as follows: 31 December 2021 31 December 2020 Group Partial Internal Model SCR 4,226 3,962 Exclude impact General Account (101) (71) Insurance Partial Internal Model SCR 4,125 3,891 Impact of Real Estate Internal Model (184) (271) Additional Spread Risk 252 623 Less Diversification (13) 11 Less adjustment Technical Provision (156) (80) Less Deferred Tax Loss Mitigation 9 (72) Insurance SCR ageas 4,033 4,103 31 December 2021 31 December 2020 Group Eligible Solvency II Own Funds under Partial Internal Model 7,956 7,869 Exclusion of General Account (204) (289) Revaluation of Technical Provision (112) (221) Recognition of Parking Concessions 399 362 Recalculation of Non Transferable (107) 40 Group Eligible Solvency II ageas Own Funds 7,932 7,761 Insurance SCR ageas decreased from EUR 4,103 million at Q4 2020 to EUR 4,033 million at Q4 2021 mainly explained by the following drivers:  Market risk increased due to new investments in equity and property risks mainly offset by a credit model change introduced in Belgium in Q4 2021. The re-risking demonstrates the ongoing search for yield, but is applied withing the predefined risk appetite limits.  Life and non-life underwriting risks increased mainly due to higher lapse, expense and catastrophe risks.  These increases were more than offset by the increase in the Loss Absorbing Capacity of Technical Provisions. Since 2021, the Loss Absorbing Capacity of Technical Provisions includes the overflow account. This overflow account was introduced in the modelling framework to better reflect how the financial result is managed in going concern. The previous model realized capital gains and losses in a way consistent with Solvency II contract boundaries (run-off view), which gave a distorted view of the future financial margin realized in going concern. The increase in SCR due to the addition of AgeSA was partially offset by the decrease in SCR after the disposal of Tesco Underwriting. 31 December 2021 31 December 2020 Solvency Solvency Own Funds SCR Ratio Own Funds SCR Ratio Belgium 6,116 2,884 212.1% 5,882 3,019 194.8% UK 751 431 174.2% 840 463 181.5% Continental Europe 1,172 728 161.0% 1,051 634 165.8% Reinsurance 905 405 223.3% 832 407 204.4% General Account including elimination and diversification 904 211 1,035 161 Non-transferable own funds / Diversification (1,713) (531) (1,583) (513) Total Ageas 8,135 4,128 197.1% 8,057 4,171 193.2% The Target capital ratio is set at 175% based on SCR ageas . 157 Ageas Annual Report 2021 158 | 240 6.1 Employee benefits This note covers post- employment benefits, other long-term employee benefits and termination benefits. Post- employment benefits are employee benefits, such as pensions and post-employment medical care, which are payable after the end of employment. Other long-term employee benefits are employee benefits that are not (fully) due within twelve months of the period in which the employees rendered the related service, including long-service awards and long- term disability benefits. Termination benefits are employee benefits payable as a result of the premature end of the employee’s employment contract. The table below shows an overview of all the employee benefits’ liabilities (assets) at Ageas. 2021 2020 Post-employment benefits - defined benefit plans - pensions 727 825 Other post-employment benefits 137 153 Other long-term employee benefits 17 18 Termination benefits 5 4 Total net defined benefits liabilities (assets) 886 1,000 Liabilities and related service cost are calculated according to the Projected Unit Credit Method. The objective of this method is to expense each participant’s benefits as they would accrue taking into account future compensation increases and the plan’s benefit allocation principles. The defined benefit obligation is the net present value of the participant’s attributed benefits measured at the reporting date. The current service cost is the net present value of the participant’s benefits attributed to service during the year. The pension cost includes net interest expense, calculated by applying the discount rate to the net pension liability. The discount rate is a high-quality corporate bond rate where there is an active market in such bonds, and a government bond rate in other markets. Some assets might be restricted to their recoverable amount in the form of a reduction in future contributions or a cash refund (asset ceiling). Additionally, there might be recognition of a liability from a minimum funding requirement. The recognition of actuarial gains and losses for post-employment benefits occurs in other comprehensive income, whereas those for other long-term employee benefits and termination benefits occur in the income statement. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 6 Remuneration and benefits 159 | 240 6.1.1 Post-employment benefits Defined benefit pension plans and other post-employment benefits Ageas operates defined benefit pension plans covering the majority of its employees. Under defined benefit pension plans, benefits are calculated based on years of service and level of salary. Pension obligations are determined on the basis of mortality tables, employee turnover, wage drift and economic assumptions such as inflation and discount rate. Discount rates are set per country or region on the basis of the yield (at closing date) of corporate AA bonds. These defined benefit plans expose the Group to actuarial risks, such as longevity, currency, interest rate and market risk. In addition to pensions, post-employment benefits may also include other expenses such as reimbursement of part of health insurance premiums, which continue to be granted to employees after retirement. Defined contribution plans Ageas operates a number of defined contribution plans worldwide. The employer’s commitment to a defined contribution plan is limited to the payment of contributions calculated in accordance with the plan’s regulations. Employer contributions to defined contribution plans amounted to EUR 11 million in 2021 (2020: EUR 11 million) and are included in staff expenses (see note 40). In Belgium, Ageas has defined contribution plans in accordance with the Law of 28 April 2003 regarding occupational pensions (WAP/LPC plans). These plans commit the employer to the payment of contributions as the plan’s terms provide, and to guarantee a minimum return linked to Belgian government bonds yields, subject to a floor of 1.75% and a cap of 3.75%. The law of 18 December 2015 to ensure the sustainability and social nature of occupational pensions, and to ensure the strengthening of the additional character relative to the retirement pensions, modifies the commitment of the employer to these plans. As of 1 January 2016, the interest rate guaranteed by the employer is equal to a percentage (equal to 65%) of the average return on the Belgian linear bonds with a term of 10 years over the 24 months preceding to 1 June. This rate will take effect on 1 January of the following year. This calculation results in a guaranteed interest rate of 1.75% on 1 January 2021 (1.75% on 1 January 2020). Because of these minimum return guarantees, WAP/LPC plans do not meet, in a strict sense, the definition of defined contribution plans of IAS 19. Although IAS 19 does not address the accounting for hybrid plans, the law change as at 1 January 2016 facilitated accounting for those plans applying the Projected Unit Credit Method. Accordingly, Ageas has estimated the defined obligation liabilities as of 1 January 2016 under IAS 19. The following table provides details of the amounts shown in the statement of financial position as at 31 December, regarding defined benefit pension obligations and other post-employment benefits. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Present value of funded obligations 294 307 Present value of unfunded obligations 785 862 137 153 Defined benefit obligation 1,079 1,169 137 153 Fair value of plan assets (363) (353) 716 816 137 153 Asset ceiling / minimum funding requirement 10 8 Other amounts recognised in the statement of financial position 1 1 Net defined benefit liabilities (assets) 727 825 137 153 Amounts in the statement of financial position: Defined benefit liabilities 808 870 137 153 Defined benefit assets (81) (45) Net defined benefit liabilities (assets) 727 825 137 153 GENERAL NOTES 158 Ageas Annual Report 2021 Remuneration and beneﬁts 158 | 240 6.1 Employee benefits This note covers post- employment benefits, other long-term employee benefits and termination benefits. Post- employment benefits are employee benefits, such as pensions and post-employment medical care, which are payable after the end of employment. Other long-term employee benefits are employee benefits that are not (fully) due within twelve months of the period in which the employees rendered the related service, including long-service awards and long- term disability benefits. Termination benefits are employee benefits payable as a result of the premature end of the employee’s employment contract. The table below shows an overview of all the employee benefits’ liabilities (assets) at Ageas. 2021 2020 Post-employment benefits - defined benefit plans - pensions 727 825 Other post-employment benefits 137 153 Other long-term employee benefits 17 18 Termination benefits 5 4 Total net defined benefits liabilities (assets) 886 1,000 Liabilities and related service cost are calculated according to the Projected Unit Credit Method. The objective of this method is to expense each participant’s benefits as they would accrue taking into account future compensation increases and the plan’s benefit allocation principles. The defined benefit obligation is the net present value of the participant’s attributed benefits measured at the reporting date. The current service cost is the net present value of the participant’s benefits attributed to service during the year. The pension cost includes net interest expense, calculated by applying the discount rate to the net pension liability. The discount rate is a high-quality corporate bond rate where there is an active market in such bonds, and a government bond rate in other markets. Some assets might be restricted to their recoverable amount in the form of a reduction in future contributions or a cash refund (asset ceiling). Additionally, there might be recognition of a liability from a minimum funding requirement. The recognition of actuarial gains and losses for post-employment benefits occurs in other comprehensive income, whereas those for other long-term employee benefits and termination benefits occur in the income statement. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 6 Remuneration and benefits 159 | 240 6.1.1 Post-employment benefits Defined benefit pension plans and other post-employment benefits Ageas operates defined benefit pension plans covering the majority of its employees. Under defined benefit pension plans, benefits are calculated based on years of service and level of salary. Pension obligations are determined on the basis of mortality tables, employee turnover, wage drift and economic assumptions such as inflation and discount rate. Discount rates are set per country or region on the basis of the yield (at closing date) of corporate AA bonds. These defined benefit plans expose the Group to actuarial risks, such as longevity, currency, interest rate and market risk. In addition to pensions, post-employment benefits may also include other expenses such as reimbursement of part of health insurance premiums, which continue to be granted to employees after retirement. Defined contribution plans Ageas operates a number of defined contribution plans worldwide. The employer’s commitment to a defined contribution plan is limited to the payment of contributions calculated in accordance with the plan’s regulations. Employer contributions to defined contribution plans amounted to EUR 11 million in 2021 (2020: EUR 11 million) and are included in staff expenses (see note 40). In Belgium, Ageas has defined contribution plans in accordance with the Law of 28 April 2003 regarding occupational pensions (WAP/LPC plans). These plans commit the employer to the payment of contributions as the plan’s terms provide, and to guarantee a minimum return linked to Belgian government bonds yields, subject to a floor of 1.75% and a cap of 3.75%. The law of 18 December 2015 to ensure the sustainability and social nature of occupational pensions, and to ensure the strengthening of the additional character relative to the retirement pensions, modifies the commitment of the employer to these plans. As of 1 January 2016, the interest rate guaranteed by the employer is equal to a percentage (equal to 65%) of the average return on the Belgian linear bonds with a term of 10 years over the 24 months preceding to 1 June. This rate will take effect on 1 January of the following year. This calculation results in a guaranteed interest rate of 1.75% on 1 January 2021 (1.75% on 1 January 2020). Because of these minimum return guarantees, WAP/LPC plans do not meet, in a strict sense, the definition of defined contribution plans of IAS 19. Although IAS 19 does not address the accounting for hybrid plans, the law change as at 1 January 2016 facilitated accounting for those plans applying the Projected Unit Credit Method. Accordingly, Ageas has estimated the defined obligation liabilities as of 1 January 2016 under IAS 19. The following table provides details of the amounts shown in the statement of financial position as at 31 December, regarding defined benefit pension obligations and other post-employment benefits. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Present value of funded obligations 294 307 Present value of unfunded obligations 785 862 137 153 Defined benefit obligation 1,079 1,169 137 153 Fair value of plan assets (363) (353) 716 816 137 153 Asset ceiling / minimum funding requirement 10 8 Other amounts recognised in the statement of financial position 1 1 Net defined benefit liabilities (assets) 727 825 137 153 Amounts in the statement of financial position: Defined benefit liabilities 808 870 137 153 Defined benefit assets (81) (45) Net defined benefit liabilities (assets) 727 825 137 153 159 Ageas Annual Report 2021 160 | 240 Defined benefit liabilities are classified under accrued interest and other liabilities (see note 24) and defined benefit assets are classified under accrued interest and other assets (see note 15). As Ageas is a financial institution specialising in the management of employee benefits, some of its employees’ pension plans are insured by Ageas insurance companies. Under IFRS, the assets backing these pension plans are non-qualifying and consequently may not be considered plan assets. For this reason, these plans are classified as ‘unfunded’. From an economic point of view, the net defined liability is offset by the non-qualifying plan assets that are held within Ageas (2021: EUR 544 million; 2020: EUR 531 million), resulting in a net liability of EUR 184 million in 2021 (2020: EUR 294 million) for defined benefit pension obligations. The following table reflects the changes in net defined benefit liabilities (assets) as recognised in the statement of financial position. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Net defined benefit liabilities (assets) as at 1 January 825 742 153 140 Total defined benefit expense 58 59 5 5 Employer's contributions (4) (3) Participants' contributions paid to the employer 2 2 Benefits directly paid by the employer (40) (37) (3) (3) Foreign exchange differences (2) 1 Other 1 1 Remeasurement (113) 60 (18) 11 Net defined benefit liabilities (assets) as at 31 December 727 825 137 153 The table below shows the changes in the defined benefit obligation. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Defined benefit obligation as at 1 January 1,169 1,071 153 140 Current service cost 57 53 4 4 Interest cost 5 10 1 1 Past service cost - vested and non-vested benefits 2 Remeasurement (112) 93 (18) 11 Participants' contributions paid to the employer 2 2 Benefits paid (18) (13) Benefits directly paid by the employer (40) (37) (3) (3) Foreign exchange differences 16 (12) Defined benefit obligation as at 31 December 1,079 1,169 137 153 The following table shows the changes in the fair value of plan assets. Defined benefit pension plans 2021 2020 Fair value of plan assets as at 1 January 353 343 Interest income 4 5 Remeasurement (return on plan assets, excluding effect of interest rate) 3 29 Employer's contributions 2 2 Benefits paid (16) (12) Foreign exchange differences 18 (13) Other (1) (1) Fair value of plan assets as at 31 December 363 353 161 | 240 The following table shows the changes in the asset ceiling and/or minimum funding requirement. 2021 2020 Asset ceiling / minimum funding requirement as at 1 January 8 12 Remeasurement 2 (4) Asset ceiling / minimum funding requirement as at 31 December 10 8 The asset ceiling relates to Ageas entities in Portugal. The following table shows the components affecting the income statement that relate to the defined benefit pension plans and other post-employment benefits for the year ended 31 December. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Current service cost 57 53 4 4 Net interest cost 1 5 1 1 Past service cost - vested and non-vested benefits 2 Settlements (1) Total defined benefit expense 58 59 5 5 Net interest cost and other are included in financing costs (see note 37). All other items are included in staff expenses (see note 40). The following table shows the composition of remeasurements for the year ended 31 December. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Return on plan assets, excluding effect of interest rate (3) (29) Remeasurement on asset ceiling / minimum funding requirement 2 (4) Actuarial (gains) losses with regard to: change in demographic assumptions (7) 14 change in financial assumptions (86) 96 (16) experience adjustments (19) (3) (2) (3) Remeasurement on net defined liability (asset) (113) 60 (18) 11 Remeasurement of the net defined benefit liability is recognised in other comprehensive income. Remeasurements of plan assets are mainly the difference between actual return on plan assets and expected discount rate. Remeasurements of defined benefit obligations reflect the change in actuarial assumptions (i.e. demographic and financial assumptions) and the experience adjustment. Experience adjustments are actuarial gains and losses that arise because of differences between the actuarial assumptions made at the beginning of the year and actual experience during the year. GENERAL NOTES 160 Ageas Annual Report 2021 160 | 240 Defined benefit liabilities are classified under accrued interest and other liabilities (see note 24) and defined benefit assets are classified under accrued interest and other assets (see note 15). As Ageas is a financial institution specialising in the management of employee benefits, some of its employees’ pension plans are insured by Ageas insurance companies. Under IFRS, the assets backing these pension plans are non-qualifying and consequently may not be considered plan assets. For this reason, these plans are classified as ‘unfunded’. From an economic point of view, the net defined liability is offset by the non-qualifying plan assets that are held within Ageas (2021: EUR 544 million; 2020: EUR 531 million), resulting in a net liability of EUR 184 million in 2021 (2020: EUR 294 million) for defined benefit pension obligations. The following table reflects the changes in net defined benefit liabilities (assets) as recognised in the statement of financial position. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Net defined benefit liabilities (assets) as at 1 January 825 742 153 140 Total defined benefit expense 58 59 5 5 Employer's contributions (4) (3) Participants' contributions paid to the employer 2 2 Benefits directly paid by the employer (40) (37) (3) (3) Foreign exchange differences (2) 1 Other 1 1 Remeasurement (113) 60 (18) 11 Net defined benefit liabilities (assets) as at 31 December 727 825 137 153 The table below shows the changes in the defined benefit obligation. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Defined benefit obligation as at 1 January 1,169 1,071 153 140 Current service cost 57 53 4 4 Interest cost 5 10 1 1 Past service cost - vested and non-vested benefits 2 Remeasurement (112) 93 (18) 11 Participants' contributions paid to the employer 2 2 Benefits paid (18) (13) Benefits directly paid by the employer (40) (37) (3) (3) Foreign exchange differences 16 (12) Defined benefit obligation as at 31 December 1,079 1,169 137 153 The following table shows the changes in the fair value of plan assets. Defined benefit pension plans 2021 2020 Fair value of plan assets as at 1 January 353 343 Interest income 4 5 Remeasurement (return on plan assets, excluding effect of interest rate) 3 29 Employer's contributions 2 2 Benefits paid (16) (12) Foreign exchange differences 18 (13) Other (1) (1) Fair value of plan assets as at 31 December 363 353 161 | 240 The following table shows the changes in the asset ceiling and/or minimum funding requirement. 2021 2020 Asset ceiling / minimum funding requirement as at 1 January 8 12 Remeasurement 2 (4) Asset ceiling / minimum funding requirement as at 31 December 10 8 The asset ceiling relates to Ageas entities in Portugal. The following table shows the components affecting the income statement that relate to the defined benefit pension plans and other post-employment benefits for the year ended 31 December. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Current service cost 57 53 4 4 Net interest cost 1 5 1 1 Past service cost - vested and non-vested benefits 2 Settlements (1) Total defined benefit expense 58 59 5 5 Net interest cost and other are included in financing costs (see note 37). All other items are included in staff expenses (see note 40). The following table shows the composition of remeasurements for the year ended 31 December. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Return on plan assets, excluding effect of interest rate (3) (29) Remeasurement on asset ceiling / minimum funding requirement 2 (4) Actuarial (gains) losses with regard to: change in demographic assumptions (7) 14 change in financial assumptions (86) 96 (16) experience adjustments (19) (3) (2) (3) Remeasurement on net defined liability (asset) (113) 60 (18) 11 Remeasurement of the net defined benefit liability is recognised in other comprehensive income. Remeasurements of plan assets are mainly the difference between actual return on plan assets and expected discount rate. Remeasurements of defined benefit obligations reflect the change in actuarial assumptions (i.e. demographic and financial assumptions) and the experience adjustment. Experience adjustments are actuarial gains and losses that arise because of differences between the actuarial assumptions made at the beginning of the year and actual experience during the year. 161 Ageas Annual Report 2021 162 | 240 The following table reflects the weighted average duration of the defined benefit obligation in years. Defined benefit Other post- 2021 pension plans employment benefits Weighted average duration of defined benefit obligation 15 23 The following table shows the principal actuarial assumptions made for the eurozone countries. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Low High Low High Low High Low High Discount rate 0.3% 1.1% 0.0% 0.6% 1.0% 1.2% 0.5% 0.6% Future salary increases (price inflation included) 1.5% 4.2% 1.5% 4.1% Future pension increases (price inflation included) 1.5% 1.8% 1.5% 1.7% Medical cost trend rates 2.0% 3.8% 2.0% 3.8% The discount rate for pensions is weighted by the net defined benefit liability (asset) on pensions. The largest pension schemes are in Belgium, with discount rates varying from 0.28% to 1.14%. The future salary increases varied in 2021 from 1.50% for the older employee group to 4.20% for the younger ones. The following table shows the principal actuarial assumptions made for other countries. Defined benefit pension plans 2021 2020 Discount rate 1.8% 1.3% Future salary increases (price inflation included) The eurozone represents 80% of Ageas’s total defined benefit obligations. Other countries include only obligations in the United Kingdom. Post-employment benefits in countries outside the euro-zone and the United Kingdom are not regarded as significant. A one percent change in the actuarial assumptions would have the following effect on the defined benefit obligation for defined benefit pension plans and other post-employment benefits. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Defined benefit obligation 1,079 1,169 137 153 Effect of changes in assumed discount rate: One-percent increase (13.0%) (13.0%) (19.3%) (19.5%) One-percent decrease 16.1% 16.3% 25.3% 25.8% Effect of changes in assumed future salary increase: One-percent increase 12.4% 11.4% One-percent decrease (10.2%) (9.4%) Effect of changes in assumed pension increase: One-percent increase 9.0% 8.8% One-percent decrease (7.8%) (7.6%) 163 | 240 A one percent change in assumed medical cost trend rates would have the following effect on the defined benefit obligation for medical costs. Medical Care 2021 2020 Defined benefit obligation 136 153 Effect of changes in assumed medical costs and trend rates: One-percent increase 26.9% 25.1% One-percent decrease (20.0%) (18.7%) The asset mix of the plan assets for pension obligations is as follows. 31 December 2021 % 31 December 2020 % Equity securities 41 11.3% 65 18.4% Debt securities 230 63.4% 157 44.5% Insurance contracts 27 7.4% 30 8.5% Real estate 29 8.0% 41 11.6% Cash 4 1.1% 6 1.7% Other 32 8.8% 54 15.3% Total 363 100.0% 353 100.0% The plan assets comprise predominantly fixed income securities, followed by equity securities, real estate (funds) and investment contracts with insurance companies. Ageas’s internal investment policy stipulates that investment in derivatives and emerging markets for the purpose of funding pension plans is to be avoided. The amount in ‘Other’ relates to two diversified funds in the United Kingdom. The mix of the unqualified assets for pension obligations is as follows. 31 December 2021 % 31 December 2020 % Equity securities 39 7.0% 35 6.4% Debt securities 431 77.1% 432 79.3% Insurance contracts 15 2.7% 14 2.6% Real estate 58 10.4% 57 10.5% Convertible bonds 13 2.3% 10 1.8% Cash 3 0.5% (3) (0.6%) Total 559 100.0% 545 100.0% Ageas gradually adjusts its asset allocation policy to ensure a close match between the duration of assets and that of pension liabilities. The employer’s contributions expected to be paid into post-employment benefit plans for the year ending 31 December 2021 are as follows. Defined benefit pension plans Expected contribution next year to plan assets 15 Expected contribution next year to unqualified plan assets 45 GENERAL NOTES 162 Ageas Annual Report 2021 162 | 240 The following table reflects the weighted average duration of the defined benefit obligation in years. Defined benefit Other post- 2021 pension plans employment benefits Weighted average duration of defined benefit obligation 15 23 The following table shows the principal actuarial assumptions made for the eurozone countries. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Low High Low High Low High Low High Discount rate 0.3% 1.1% 0.0% 0.6% 1.0% 1.2% 0.5% 0.6% Future salary increases (price inflation included) 1.5% 4.2% 1.5% 4.1% Future pension increases (price inflation included) 1.5% 1.8% 1.5% 1.7% Medical cost trend rates 2.0% 3.8% 2.0% 3.8% The discount rate for pensions is weighted by the net defined benefit liability (asset) on pensions. The largest pension schemes are in Belgium, with discount rates varying from 0.28% to 1.14%. The future salary increases varied in 2021 from 1.50% for the older employee group to 4.20% for the younger ones. The following table shows the principal actuarial assumptions made for other countries. Defined benefit pension plans 2021 2020 Discount rate 1.8% 1.3% Future salary increases (price inflation included) The eurozone represents 80% of Ageas’s total defined benefit obligations. Other countries include only obligations in the United Kingdom. Post-employment benefits in countries outside the euro-zone and the United Kingdom are not regarded as significant. A one percent change in the actuarial assumptions would have the following effect on the defined benefit obligation for defined benefit pension plans and other post-employment benefits. Defined benefit pension plans Other post-employment benefits 2021 2020 2021 2020 Defined benefit obligation 1,079 1,169 137 153 Effect of changes in assumed discount rate: One-percent increase (13.0%) (13.0%) (19.3%) (19.5%) One-percent decrease 16.1% 16.3% 25.3% 25.8% Effect of changes in assumed future salary increase: One-percent increase 12.4% 11.4% One-percent decrease (10.2%) (9.4%) Effect of changes in assumed pension increase: One-percent increase 9.0% 8.8% One-percent decrease (7.8%) (7.6%) 163 | 240 A one percent change in assumed medical cost trend rates would have the following effect on the defined benefit obligation for medical costs. Medical Care 2021 2020 Defined benefit obligation 136 153 Effect of changes in assumed medical costs and trend rates: One-percent increase 26.9% 25.1% One-percent decrease (20.0%) (18.7%) The asset mix of the plan assets for pension obligations is as follows. 31 December 2021 % 31 December 2020 % Equity securities 41 11.3% 65 18.4% Debt securities 230 63.4% 157 44.5% Insurance contracts 27 7.4% 30 8.5% Real estate 29 8.0% 41 11.6% Cash 4 1.1% 6 1.7% Other 32 8.8% 54 15.3% Total 363 100.0% 353 100.0% The plan assets comprise predominantly fixed income securities, followed by equity securities, real estate (funds) and investment contracts with insurance companies. Ageas’s internal investment policy stipulates that investment in derivatives and emerging markets for the purpose of funding pension plans is to be avoided. The amount in ‘Other’ relates to two diversified funds in the United Kingdom. The mix of the unqualified assets for pension obligations is as follows. 31 December 2021 % 31 December 2020 % Equity securities 39 7.0% 35 6.4% Debt securities 431 77.1% 432 79.3% Insurance contracts 15 2.7% 14 2.6% Real estate 58 10.4% 57 10.5% Convertible bonds 13 2.3% 10 1.8% Cash 3 0.5% (3) (0.6%) Total 559 100.0% 545 100.0% Ageas gradually adjusts its asset allocation policy to ensure a close match between the duration of assets and that of pension liabilities. The employer’s contributions expected to be paid into post-employment benefit plans for the year ending 31 December 2021 are as follows. Defined benefit pension plans Expected contribution next year to plan assets 15 Expected contribution next year to unqualified plan assets 45 163 Ageas Annual Report 2021 164 | 240 6.1.2 Other long-term employee benefits Other long-term employee benefits include long-service awards. The table below shows net liabilities. The liabilities related to other long-term employee benefits are included in the statement of financial position under accrued interest and other liabilities (see note 24). 2021 2020 Defined benefit obligation 17 18 Net defined benefit liabilities (assets) 17 18 The following table shows the changes in liabilities for other long-term employee benefits during the year. 2021 2020 Net liability as at 1 January 18 17 Total expense 1 Benefits directly paid by the employer (1) Net liability as at 31 December 17 18 The table below provides the range of actuarial assumptions applied when calculating the liabilities for other long-term employee benefits. 2021 2020 Low High Low High Discount rate 0.32% 0.70% 0.03% 0.29% Future salary increases 2.10% 4.20% 2.00% 4.10% Expenses related to other long-term employee benefits are shown below. Interest cost is included in financing costs (see note 37), all other expenses are included in staff expenses (see note 40). 2021 2020 Current service cost 1 1 Net actuarial losses (gains) recognised immediately (1) Total expense 1 6.1.3 Termination benefits Termination benefits are employee benefits payable as a result of either an enterprise’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept voluntary redundancy in exchange for those benefits. The table below shows liabilities related to termination benefits included in the statement of financial position under accrued interest and other liabilities (see note 24). 2021 2020 Defined benefit obligation 5 4 Net defined benefit liabilities (assets) 5 4 165 | 240 The following table shows the changes in liabilities for termination benefits during the year. 2021 2020 Net liability as at 1 January 4 5 Total expense 2 1 Benefits directly paid by the employer (1) (2) Net liability as at 31 December 5 4 Expenses related to termination benefits are shown below. Interest cost is included in financing costs (see note 37). All other expenses are included in staff expenses (see note 40). 2021 2020 Current service cost 2 1 Total expense 2 1 6.2 Employee share and share-linked incentive plans Ageas’s remuneration package for its employees and Executive Committee and Management Committee Members may include share- related instruments. These benefits can take the form of:  Restricted shares;  Share-linked incentives. 6.2.1 Restricted shares The members of the Executive and Management Committee benefit from a Long-term incentive plan (LTI). This plan consists of the granting of performance shares which vest after a period of 3.5 years. The number of shares to be granted under this plan is based on the “Ageas Business Score” which is the result of the achievement on the corporate KPI's. The vesting after 3.5 years is subject to a relative total shareholder return (TSR) performance measurement as compared to a peer group. After vesting, the shares will have to be held for an additional 1.5 years (5 years in total as of date of grant). After this blocking period, the beneficiaries may sell the vested shares under certain conditions in line with the Remuneration Policy. You find more details on the plan in the Report of the Remuneration Committee section 5.7.11. For 2017 a total of 71,870 performance shares were committed to be granted, for 2018 a total of 35,612 performance shares were committed to be granted, for 2019 a total of 51,393 shares were committed to be granted and for 2020 a total of 53,269 performance shares were committed to be granted. For performance year 2021 a total of 53,918 performance shares are committed to be granted to the Executive and Management Committee Members. The table below shows the changes in commitments of restricted shares during the year for ExCo and Mco Members. (number of shares in '000) 2022 2021 Number of restricted shares committed to be granted as at 1 March 194 212 Restricted shares (cancelled) Restricted shares vested (72) Number of restricted shares committed to be granted as at 31 December 140 6.2.2 Share-linked incentives In 2019, 2020 and 2021 Ageas launched a share-linked incentive plan for its senior management. Depending on the relative performance of the Ageas share in relation to a peer group over a period of the three years following the launch of each of the plans and the condition of continued employment, the senior managers will be awarded a cash payment equal to a value:  between 0 and the value of 125,160 Ageas shares on 1 April 2022 (plan 2019);  between 0 and the value of 135,480 Ageas shares on 1 April 2023 (plan 2020);  between 0 and the value of 141,400 Ageas shares on 1 April 2024 (plan 2021). The liability of these cash-settled transactions is determined at fair value at each reporting date. GENERAL NOTES 164 Ageas Annual Report 2021 164 | 240 6.1.2 Other long-term employee benefits Other long-term employee benefits include long-service awards. The table below shows net liabilities. The liabilities related to other long-term employee benefits are included in the statement of financial position under accrued interest and other liabilities (see note 24). 2021 2020 Defined benefit obligation 17 18 Net defined benefit liabilities (assets) 17 18 The following table shows the changes in liabilities for other long-term employee benefits during the year. 2021 2020 Net liability as at 1 January 18 17 Total expense 1 Benefits directly paid by the employer (1) Net liability as at 31 December 17 18 The table below provides the range of actuarial assumptions applied when calculating the liabilities for other long-term employee benefits. 2021 2020 Low High Low High Discount rate 0.32% 0.70% 0.03% 0.29% Future salary increases 2.10% 4.20% 2.00% 4.10% Expenses related to other long-term employee benefits are shown below. Interest cost is included in financing costs (see note 37), all other expenses are included in staff expenses (see note 40). 2021 2020 Current service cost 1 1 Net actuarial losses (gains) recognised immediately (1) Total expense 1 6.1.3 Termination benefits Termination benefits are employee benefits payable as a result of either an enterprise’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept voluntary redundancy in exchange for those benefits. The table below shows liabilities related to termination benefits included in the statement of financial position under accrued interest and other liabilities (see note 24). 2021 2020 Defined benefit obligation 5 4 Net defined benefit liabilities (assets) 5 4 165 | 240 The following table shows the changes in liabilities for termination benefits during the year. 2021 2020 Net liability as at 1 January 4 5 Total expense 2 1 Benefits directly paid by the employer (1) (2) Net liability as at 31 December 5 4 Expenses related to termination benefits are shown below. Interest cost is included in financing costs (see note 37). All other expenses are included in staff expenses (see note 40). 2021 2020 Current service cost 2 1 Total expense 2 1 6.2 Employee share and share-linked incentive plans Ageas’s remuneration package for its employees and Executive Committee and Management Committee Members may include share- related instruments. These benefits can take the form of:  Restricted shares;  Share-linked incentives. 6.2.1 Restricted shares The members of the Executive and Management Committee benefit from a Long-term incentive plan (LTI). This plan consists of the granting of performance shares which vest after a period of 3.5 years. The number of shares to be granted under this plan is based on the “Ageas Business Score” which is the result of the achievement on the corporate KPI's. The vesting after 3.5 years is subject to a relative total shareholder return (TSR) performance measurement as compared to a peer group. After vesting, the shares will have to be held for an additional 1.5 years (5 years in total as of date of grant). After this blocking period, the beneficiaries may sell the vested shares under certain conditions in line with the Remuneration Policy. You find more details on the plan in the Report of the Remuneration Committee section 5.7.11. For 2017 a total of 71,870 performance shares were committed to be granted, for 2018 a total of 35,612 performance shares were committed to be granted, for 2019 a total of 51,393 shares were committed to be granted and for 2020 a total of 53,269 performance shares were committed to be granted. For performance year 2021 a total of 53,918 performance shares are committed to be granted to the Executive and Management Committee Members. The table below shows the changes in commitments of restricted shares during the year for ExCo and Mco Members. (number of shares in '000) 2022 2021 Number of restricted shares committed to be granted as at 1 March 194 212 Restricted shares (cancelled) Restricted shares vested (72) Number of restricted shares committed to be granted as at 31 December 140 6.2.2 Share-linked incentives In 2019, 2020 and 2021 Ageas launched a share-linked incentive plan for its senior management. Depending on the relative performance of the Ageas share in relation to a peer group over a period of the three years following the launch of each of the plans and the condition of continued employment, the senior managers will be awarded a cash payment equal to a value:  between 0 and the value of 125,160 Ageas shares on 1 April 2022 (plan 2019);  between 0 and the value of 135,480 Ageas shares on 1 April 2023 (plan 2020);  between 0 and the value of 141,400 Ageas shares on 1 April 2024 (plan 2021). The liability of these cash-settled transactions is determined at fair value at each reporting date. 165 Ageas Annual Report 2021 166 | 240 6.3 Remuneration of the Board of Directors and Executive Committee Members 6.3.1 Remuneration of the Board of Directors Changes in the Board of Directors in 2021 The Board of Directors currently consists of fourteen members: Bart De Smet (Chairman), Guy de Selliers de Moranville (Vice-Chairman), Katleen Vandeweyer, Jane Murphy, Richard Jackson, Lucrezia Reichlin, Yvonne Lang Ketterer, Sonali Chandmal and Jean-Michel Chatagny as Non- Executive Directors and, Hans De Cuyper (CEO), Christophe Boizard (CFO), Filip Coremans (MD Asia), Antonio Cano (MD Europe) and Emmanuel Van Grimbergen (CRO) as Executive Directors. Lionel Perl and Jan Zegering Hadders stepped down as Members of the Board at the General Meeting of Shareholders on 19 May 2021 and Jean- Michel Chatagny was appointed as Member of the Board of ageas SA/NV at the same meeting. Regarding Board membership of Non-Executive Board Members at Ageas subsidiaries, Bart De Smet and Richard Jackson are member of the Board of Directors of Ageas UK Ltd, Guy de Selliers de Moranville is Chairman of the Board of Directors of AG Insurance SA/NV and Katleen Vandeweyer is a member of this Board. Jane Murphy is member of the Board of Directors of Ageas France S.A and Yvonne Lang Ketterer and Sonali Chandmal are member of the Board of Directors of Ageas Portugal Holdings SGSP (PT), of Médis (Companhia Portuguesa de Seguros de Saude S.A.), Ageas Portugal - Companhia Portuguesa de Seguros S.A. and Ageas Portugal - Companhia Portuguesa de Seguros de Vida S.A. To the extent that these positions are remunerated, the amounts paid out are disclosed in the tables below. Remuneration of the Board of Directors Total remuneration of Non-Executive Board Members amounted to EUR 1.48 million in the 2021 financial year (2020: EUR 1.77 million). This remuneration includes the basic remuneration for Board Membership and the attendance fees for Board Meetings and Board Committee meetings both at the level of Ageas and at its subsidiaries. The remuneration received by Board of Directors Members in 2021 is detailed in the table below. The number of Ageas shares held by Board Members at 31 December 2021 is reported in the same table. Fixed fees Attendance fees Ageas Shares Incumbent Name (1) Function (2) 2021 2021 Total (4) at 31/12/2021 Bart De Smet Chairman 120,000 37,500 157,500 37,121 Guy de Selliers de Moranville Vice-chairman 60,000 42,000 102,000 264,390 (5) Lionel Perl Non-executive Board member 25,000 13,000 38,000 - Jan Zegering Hadders Non-executive Board member 25,000 16,000 41,000 - Yvonne Lang Ketterer Non-executive Board member 60,000 44,000 104,000 - Richard Jackson Non-executive Board member 60,000 42,500 102,500 - Jane Murphy Non-executive Board member 60,000 34,000 94,000 - Lucrezia Reichlin Non-executive Board member 60,000 34,000 94,000 - Katleen Vandeweyer Non-executive Board member 60,000 29,000 89,000 - Sonali Chandmal Non-executive Board member 60,000 33,000 93,000 - Jean-Michel Chatagny Non-executive Board member 35,000 23,500 58,500 - Hans De Cuyper Chief Executive Officer (CEO) (3) - - see infra 6,145 Christophe Boizard Chief Financial Officer (CFO) (3) - - see infra 26,548 Filip Coremans Managing Director Asia (MD Asia) (3) - - see infra 13,501 Antonio Cano Managing Director Europe (MD Europe) (3) - - see infra 16,076 Emmanuel Van Grimbergen Chief Risk Officer (CRO) (3) - - see infra 8,554 Total 625,000 348,500 973,500 372,335 (1) Jean-Michel Chatagny joined the board as of 01/05/2021. Lionel Perl and Jan Zegering Hadders stepped down at 01/05/2021. (2) Board Members also receive an attendance fee for committee meetings they attend as invitee. (3) The Executive Board members are not remunerated as Board Members, but as Executive Committee members. (4) Excluding reimbursement of expenses. (5) 240,000 Shares held indirectly via trusts. This number includes a correction compared to past publications. Mr. de Selliers confirmed that this correction has to be made because of a practical mistake and confirmed that there were no transactions made by this trust in Ageas shares in the course of 2021 167 | 240 The remuneration received by Board of Directors Members in 2021 for their mandates in subsidiaries of Ageas is mentioned in the table below. Incumbent Name (1) Function Fixed fees 2021 Attendance fees 2021 Total (2) Bart De Smet Chairman 41,250 12,000 53,250 Guy de Selliers de Moranville Vice-chairman 60,000 26,000 86,000 Jan Zegering Hadders Non-executive Board member 15,000 7,000 22,000 Lionel Perl Non-executive Board member 85,678 5,500 91,178 Richard Jackson Non-executive Board member 33,750 11,500 45,250 Jane Murphy Non-executive Board member 45,000 24,000 69,000 Lucrezia Reichlin Non-executive Board member - - - Yvonne Lang Ketterer Non-executive Board member 33,750 13,500 47,250 Sonali Chandmal Non-executive Board member 33,750 14,500 48,250 Katleen Vandeweyer Non-executive Board member 30,000 18,000 48,000 Hans De Cuyper Chief Executive Officer (CEO) - - - Christophe Boizard Chief Financial Officer (CFO) - - - Filip Coremans Managing Director Asia (MD Asia) - - - Antonio Cano Managing Director Europe (MD Europe) - - - Emmanuel Van Grimbergen Chief Risk Officer (CRO) - - - Total 378,178 132,000 510,178 (1) The Executive Board members are not remunerated as Board Members, but as Executive Committee members. (see note 6.3.2 for details of their remuneration) (2) Excluding reimbursement of expenses. 6.3.2 Remuneration of the Executive Committee Members. 6.3.2.1 The Executive Committee in 2021 At 31 December 2021, the Executive Committee of Ageas was composed of Hans De Cuyper (CEO), Christophe Boizard (CFO), Filip Coremans (MD Asia), Antonio Cano (MD Europe) and Emmanuel Van Grimbergen (CRO). 6.3.2.2 Total Remuneration 2021 of the Executive Committee In 2021, the total remuneration including pension contributions and fringe benefits of the Executive Committee amounted to EUR 7,197,532 compared to EUR 7,749,540 in 2020. This was comprised of:  a fixed remuneration of EUR 2,992,150 (compared to EUR 2,939,758 in 2020) consisting of a base compensation of 2,590,000 EUR and other benefits (health, death & disability cover and company car) of EUR 402,150;  a variable remuneration of EUR 3,279,138 (compared to EUR 3,395,201 in 2020) consisting of a one year-variable remuneration (STI) of EUR 1,530,888 payable in cash over a period of 3 years and a multi-year variable (LTI) in the form of shares of EUR 1,748,250  pension expenses of EUR 926,244 (excluding taxes) (compared to EUR 986,122 (excluding taxes) in 2020). The table below gives an overview of all pay elements for members of the Executive Committee. - 1 - - 2 - - 3 - - 4 - - 5 - Fixed Variable Extraordinary Pension Total Proportion Remuneration Remuneration Items Expense Remuneration of Incumbent Base Other One-Year Multi-year Fixed Variable Name Compensation Fees Benefits Variable Variable (1) (1+4)/5 (2+3)/5 H. De Cuyper 650,000 - 86,748 389,676 438,750 - 171,504 1,736,678 52% 48% C. Boizard 485,000 - 101,086 280,575 327,375 - 196,890 1,390,926 56% 44% E. Van Grimbergen 485,000 - 62,629 284,211 327,375 - 161,352 1,320,567 54% 46% A. Cano 485,000 - 77,750 285,667 327,375 - 197,691 1,373,483 55% 45% F. Coremans 485,000 - 73,937 290,759 327,375 - 198,807 1,375,878 55% 45% Total 2,590,000 - 402,150 1,530,888 1,748,250 0 926,244 7,197,532 (1) Market value of multi-year variable at granting. The vesting after 3.5 years is subject to a relative TSR performance measurement as compared to a peer group. GENERAL NOTES 166 Ageas Annual Report 2021 166 | 240 6.3 Remuneration of the Board of Directors and Executive Committee Members 6.3.1 Remuneration of the Board of Directors Changes in the Board of Directors in 2021 The Board of Directors currently consists of fourteen members: Bart De Smet (Chairman), Guy de Selliers de Moranville (Vice-Chairman), Katleen Vandeweyer, Jane Murphy, Richard Jackson, Lucrezia Reichlin, Yvonne Lang Ketterer, Sonali Chandmal and Jean-Michel Chatagny as Non- Executive Directors and, Hans De Cuyper (CEO), Christophe Boizard (CFO), Filip Coremans (MD Asia), Antonio Cano (MD Europe) and Emmanuel Van Grimbergen (CRO) as Executive Directors. Lionel Perl and Jan Zegering Hadders stepped down as Members of the Board at the General Meeting of Shareholders on 19 May 2021 and Jean- Michel Chatagny was appointed as Member of the Board of ageas SA/NV at the same meeting. Regarding Board membership of Non-Executive Board Members at Ageas subsidiaries, Bart De Smet and Richard Jackson are member of the Board of Directors of Ageas UK Ltd, Guy de Selliers de Moranville is Chairman of the Board of Directors of AG Insurance SA/NV and Katleen Vandeweyer is a member of this Board. Jane Murphy is member of the Board of Directors of Ageas France S.A and Yvonne Lang Ketterer and Sonali Chandmal are member of the Board of Directors of Ageas Portugal Holdings SGSP (PT), of Médis (Companhia Portuguesa de Seguros de Saude S.A.), Ageas Portugal - Companhia Portuguesa de Seguros S.A. and Ageas Portugal - Companhia Portuguesa de Seguros de Vida S.A. To the extent that these positions are remunerated, the amounts paid out are disclosed in the tables below. Remuneration of the Board of Directors Total remuneration of Non-Executive Board Members amounted to EUR 1.48 million in the 2021 financial year (2020: EUR 1.77 million). This remuneration includes the basic remuneration for Board Membership and the attendance fees for Board Meetings and Board Committee meetings both at the level of Ageas and at its subsidiaries. The remuneration received by Board of Directors Members in 2021 is detailed in the table below. The number of Ageas shares held by Board Members at 31 December 2021 is reported in the same table. Fixed fees Attendance fees Ageas Shares Incumbent Name (1) Function (2) 2021 2021 Total (4) at 31/12/2021 Bart De Smet Chairman 120,000 37,500 157,500 37,121 Guy de Selliers de Moranville Vice-chairman 60,000 42,000 102,000 264,390 (5) Lionel Perl Non-executive Board member 25,000 13,000 38,000 - Jan Zegering Hadders Non-executive Board member 25,000 16,000 41,000 - Yvonne Lang Ketterer Non-executive Board member 60,000 44,000 104,000 - Richard Jackson Non-executive Board member 60,000 42,500 102,500 - Jane Murphy Non-executive Board member 60,000 34,000 94,000 - Lucrezia Reichlin Non-executive Board member 60,000 34,000 94,000 - Katleen Vandeweyer Non-executive Board member 60,000 29,000 89,000 - Sonali Chandmal Non-executive Board member 60,000 33,000 93,000 - Jean-Michel Chatagny Non-executive Board member 35,000 23,500 58,500 - Hans De Cuyper Chief Executive Officer (CEO) (3) - - see infra 6,145 Christophe Boizard Chief Financial Officer (CFO) (3) - - see infra 26,548 Filip Coremans Managing Director Asia (MD Asia) (3) - - see infra 13,501 Antonio Cano Managing Director Europe (MD Europe) (3) - - see infra 16,076 Emmanuel Van Grimbergen Chief Risk Officer (CRO) (3) - - see infra 8,554 Total 625,000 348,500 973,500 372,335 (1) Jean-Michel Chatagny joined the board as of 01/05/2021. Lionel Perl and Jan Zegering Hadders stepped down at 01/05/2021. (2) Board Members also receive an attendance fee for committee meetings they attend as invitee. (3) The Executive Board members are not remunerated as Board Members, but as Executive Committee members. (4) Excluding reimbursement of expenses. (5) 240,000 Shares held indirectly via trusts. This number includes a correction compared to past publications. Mr. de Selliers confirmed that this correction has to be made because of a practical mistake and confirmed that there were no transactions made by this trust in Ageas shares in the course of 2021 167 | 240 The remuneration received by Board of Directors Members in 2021 for their mandates in subsidiaries of Ageas is mentioned in the table below. Incumbent Name (1) Function Fixed fees 2021 Attendance fees 2021 Total (2) Bart De Smet Chairman 41,250 12,000 53,250 Guy de Selliers de Moranville Vice-chairman 60,000 26,000 86,000 Jan Zegering Hadders Non-executive Board member 15,000 7,000 22,000 Lionel Perl Non-executive Board member 85,678 5,500 91,178 Richard Jackson Non-executive Board member 33,750 11,500 45,250 Jane Murphy Non-executive Board member 45,000 24,000 69,000 Lucrezia Reichlin Non-executive Board member - - - Yvonne Lang Ketterer Non-executive Board member 33,750 13,500 47,250 Sonali Chandmal Non-executive Board member 33,750 14,500 48,250 Katleen Vandeweyer Non-executive Board member 30,000 18,000 48,000 Hans De Cuyper Chief Executive Officer (CEO) - - - Christophe Boizard Chief Financial Officer (CFO) - - - Filip Coremans Managing Director Asia (MD Asia) - - - Antonio Cano Managing Director Europe (MD Europe) - - - Emmanuel Van Grimbergen Chief Risk Officer (CRO) - - - Total 378,178 132,000 510,178 (1) The Executive Board members are not remunerated as Board Members, but as Executive Committee members. (see note 6.3.2 for details of their remuneration) (2) Excluding reimbursement of expenses. 6.3.2 Remuneration of the Executive Committee Members. 6.3.2.1 The Executive Committee in 2021 At 31 December 2021, the Executive Committee of Ageas was composed of Hans De Cuyper (CEO), Christophe Boizard (CFO), Filip Coremans (MD Asia), Antonio Cano (MD Europe) and Emmanuel Van Grimbergen (CRO). 6.3.2.2 Total Remuneration 2021 of the Executive Committee In 2021, the total remuneration including pension contributions and fringe benefits of the Executive Committee amounted to EUR 7,197,532 compared to EUR 7,749,540 in 2020. This was comprised of:  a fixed remuneration of EUR 2,992,150 (compared to EUR 2,939,758 in 2020) consisting of a base compensation of 2,590,000 EUR and other benefits (health, death & disability cover and company car) of EUR 402,150;  a variable remuneration of EUR 3,279,138 (compared to EUR 3,395,201 in 2020) consisting of a one year-variable remuneration (STI) of EUR 1,530,888 payable in cash over a period of 3 years and a multi-year variable (LTI) in the form of shares of EUR 1,748,250  pension expenses of EUR 926,244 (excluding taxes) (compared to EUR 986,122 (excluding taxes) in 2020). The table below gives an overview of all pay elements for members of the Executive Committee. - 1 - - 2 - - 3 - - 4 - - 5 - Fixed Variable Extraordinary Pension Total Proportion Remuneration Remuneration Items Expense Remuneration of Incumbent Base Other One-Year Multi-year Fixed Variable Name Compensation Fees Benefits Variable Variable (1) (1+4)/5 (2+3)/5 H. De Cuyper 650,000 - 86,748 389,676 438,750 - 171,504 1,736,678 52% 48% C. Boizard 485,000 - 101,086 280,575 327,375 - 196,890 1,390,926 56% 44% E. Van Grimbergen 485,000 - 62,629 284,211 327,375 - 161,352 1,320,567 54% 46% A. Cano 485,000 - 77,750 285,667 327,375 - 197,691 1,373,483 55% 45% F. Coremans 485,000 - 73,937 290,759 327,375 - 198,807 1,375,878 55% 45% Total 2,590,000 - 402,150 1,530,888 1,748,250 0 926,244 7,197,532 (1) Market value of multi-year variable at granting. The vesting after 3.5 years is subject to a relative TSR performance measurement as compared to a peer group. 167 Ageas Annual Report 2021 168 | 240 A. FIXED REMUNERATION Fixed remuneration consists of base compensation, fees and other benefits such as health, death & disability cover and company car. Base Compensation The table below shows the 2021 base compensation levels of the Executive Committee and how they compare to 2020. Incumbent Name 2021 (1) 2020 (1) % Bart De Smet (CEO) na 583,333 na Hans De Cuyper (CEO) 650,000 108,333 na Christophe Boizard (CFO) 485,000 485,000 100% Emmanuel Van Grimbergen (CRO)(2) 485,000 400,000 121% Antonio Cano (MD Europe) 485,000 485,000 100% Filip Coremans (MD Asia) 485,000 485,000 100% Total 2,590,000 2,546,666 102% (1) For Bart De Smet until 22/10/2020 and for Hans De Cuyper as of 22/10/2020. 2) Base salary of Emmanuel Van Grimbergen was aligned with other ExCo- members after 1 full year in the function after appointment. Fees The Members of the Executive Committee did not receive any fees for their participation in the meetings of the Board of Directors. Other Benefits The Members of the Executive Committee received a total aggregated amount of EUR 402,150 representing other benefits in line with the remuneration policy. B. VARIABLE REMUNERATION Variable remuneration consists of the Short-term incentive (STI – one- year variable) and the Long-term incentive (LTI - multi-year variable). STI (“One-Year Variable”) Based on the Ageas Business Score for the year under review as well as the individual performance score (and function performance for the CRO), this led to the following actual STI pay-out percentages (target = 50% of base compensation, range 0-100% of base compensation):  Hans De Cuyper (CEO) 120% of target;  Christophe Boizard (CFO) 116% of target;  Emmanuel Van Grimbergen (CRO) 117% of target;  Antonio Cano (MD Europe) 118% of target;  Filip Coremans (MD Asia) 120% of target. You find a detailed overview of the assessment of all performance KPI’s in section 5.7.6. For the performance year 2021, a STI for a total amount of EUR 1,530,888 was granted. 50% of this amount will be paid in 2022 the remaining part is deferred to 2023 and 2024 and will be adjusted for performance accordingly. The STI paid in 2022 consists of 50% of the STI earned for the performance year 2021, 25% of the STI earned for 2020 and 25% of the STI earned for 2019. The pay-outs corresponding to performance years 2019 and 2020 were adjusted based on performance over the years 2021 and 2020. You will find below the individual amounts for each member of the Executive Committee: STI granted STI paid in 2022 for performance for performance years year 2021 2020 2019 Incumbent Name 2021 50% 25% 25% Total Hans De Cuyper (CEO) (1) 389,676 194,838 17,064 - 211,902 Christophe Boizard (CFO) 280,575 140,287 74,385 75,683 290,355 Emmanuel Van Grimbergen (CRO) 284,211 142,105 60,527 34,893 237,525 Antonio Cano (MD Europe) 285,667 142,833 75,114 76,775 294,722 Filip Coremans (MD Asia) 290,759 145,379 76,751 76,775 298,905 Total 1,530,888 1,333,409 (1) As of 22 October 2020. 169 | 240 LTI (“Multi-Year Variable”) Grant made in 2021 With an Ageas business score of 5 (on a range of 1 to 7), the Board of Directors decided on a grant for 2021 of 150% of the target (i.e. 67.5% of base compensation). Based on the volume weighted average price (VWAP) of EUR 43.4821 of the Ageas share over the month of February 2022, this resulted in a conditional grant of 40,206 shares for an amount of EUR 1,748,250 in comparison to 2020 when 37,620 shares were granted for an amount of EUR 1,719,000. The shares will be blocked until 2027 and will be adjusted at vesting on 30 June of N+4 based on the relative Total Shareholder Return (TSR) ranking of the Ageas share over the performance period. The number of shares granted for 2021 is detailed in the following table: Share Price at Grant Number of Shares Incumbent Name Date of Grant Date Granted Hans De Cuyper (CEO) 01/03/2022 43.4821 10,090 Christophe Boizard (CFO) 01/03/2022 43.4821 7,529 Emmanuel Van Grimbergen (CRO) 01/03/2022 43.4821 7,529 Antonio Cano (MD Europe) 01/03/2022 43.4821 7,529 Filip Coremans (MD Asia) 01/03/2022 43.4821 7,529 Total 40,206 2021 vesting The 2017- LTI plan vested on 30 June 2021. According the terms and conditions of the LTI Plan 2017, the initial number of Ageas shares committed to be granted was adjusted based on the relative TSR performance of Ageas within a predefined peer group of companies which was top quartile. In any case the total shares attributed at vesting can never exceed an amount of shares equal to 90% of base compensation/ageas share price at initial grant. . The table below gives an overview of the number of vested shares for each member of the ExCo: Number of shares Adjusted Number of Number of committed to be number vested shares sold to shares blocked Incumbent Name granted for 2017 on 30 June 2021 finance income tax till 1 January 2023 Hans De Cuyper (1) 5,973 5,973 2,924 3,049 Christophe Boizard 9,715 9,715 4,756 4,959 Emmanuel Van Grimbergen (2) 4,430 4,430 2,169 2,261 Antonio Cano 9,715 9,715 4,756 4,959 Filip Coremans 9,715 9,715 4,756 4,959 Total 39,548 39,548 19,361 20,187 (1) Relates to restricted shares awarded in the role of CEO AG Insurance. (2) Relates to restricted shares awarded in the role of Group Risk officer. C. EXTRAORDINARY ITEMS AND PENSION EXPENSES. A total aggregated amount of EUR 926,244 was contributed to a defined contribution pension plan for the Executive Committee members. Incumbent Name Pension Contribution Hans De Cuyper 171,504 Christophe Boizard 196,890 Emmanuel Van Grimbergen 161,352 Antonio Cano 197,691 Filip Coremans 198,807 Total 926,244 GENERAL NOTES 168 Ageas Annual Report 2021 168 | 240 A. FIXED REMUNERATION Fixed remuneration consists of base compensation, fees and other benefits such as health, death & disability cover and company car. Base Compensation The table below shows the 2021 base compensation levels of the Executive Committee and how they compare to 2020. Incumbent Name 2021 (1) 2020 (1) % Bart De Smet (CEO) na 583,333 na Hans De Cuyper (CEO) 650,000 108,333 na Christophe Boizard (CFO) 485,000 485,000 100% Emmanuel Van Grimbergen (CRO)(2) 485,000 400,000 121% Antonio Cano (MD Europe) 485,000 485,000 100% Filip Coremans (MD Asia) 485,000 485,000 100% Total 2,590,000 2,546,666 102% (1) For Bart De Smet until 22/10/2020 and for Hans De Cuyper as of 22/10/2020. 2) Base salary of Emmanuel Van Grimbergen was aligned with other ExCo- members after 1 full year in the function after appointment. Fees The Members of the Executive Committee did not receive any fees for their participation in the meetings of the Board of Directors. Other Benefits The Members of the Executive Committee received a total aggregated amount of EUR 402,150 representing other benefits in line with the remuneration policy. B. VARIABLE REMUNERATION Variable remuneration consists of the Short-term incentive (STI – one- year variable) and the Long-term incentive (LTI - multi-year variable). STI (“One-Year Variable”) Based on the Ageas Business Score for the year under review as well as the individual performance score (and function performance for the CRO), this led to the following actual STI pay-out percentages (target = 50% of base compensation, range 0-100% of base compensation):  Hans De Cuyper (CEO) 120% of target;  Christophe Boizard (CFO) 116% of target;  Emmanuel Van Grimbergen (CRO) 117% of target;  Antonio Cano (MD Europe) 118% of target;  Filip Coremans (MD Asia) 120% of target. You find a detailed overview of the assessment of all performance KPI’s in section 5.7.6. For the performance year 2021, a STI for a total amount of EUR 1,530,888 was granted. 50% of this amount will be paid in 2022 the remaining part is deferred to 2023 and 2024 and will be adjusted for performance accordingly. The STI paid in 2022 consists of 50% of the STI earned for the performance year 2021, 25% of the STI earned for 2020 and 25% of the STI earned for 2019. The pay-outs corresponding to performance years 2019 and 2020 were adjusted based on performance over the years 2021 and 2020. You will find below the individual amounts for each member of the Executive Committee: STI granted STI paid in 2022 for performance for performance years year 2021 2020 2019 Incumbent Name 2021 50% 25% 25% Total Hans De Cuyper (CEO) (1) 389,676 194,838 17,064 - 211,902 Christophe Boizard (CFO) 280,575 140,287 74,385 75,683 290,355 Emmanuel Van Grimbergen (CRO) 284,211 142,105 60,527 34,893 237,525 Antonio Cano (MD Europe) 285,667 142,833 75,114 76,775 294,722 Filip Coremans (MD Asia) 290,759 145,379 76,751 76,775 298,905 Total 1,530,888 1,333,409 (1) As of 22 October 2020. 169 | 240 LTI (“Multi-Year Variable”) Grant made in 2021 With an Ageas business score of 5 (on a range of 1 to 7), the Board of Directors decided on a grant for 2021 of 150% of the target (i.e. 67.5% of base compensation). Based on the volume weighted average price (VWAP) of EUR 43.4821 of the Ageas share over the month of February 2022, this resulted in a conditional grant of 40,206 shares for an amount of EUR 1,748,250 in comparison to 2020 when 37,620 shares were granted for an amount of EUR 1,719,000. The shares will be blocked until 2027 and will be adjusted at vesting on 30 June of N+4 based on the relative Total Shareholder Return (TSR) ranking of the Ageas share over the performance period. The number of shares granted for 2021 is detailed in the following table: Share Price at Grant Number of Shares Incumbent Name Date of Grant Date Granted Hans De Cuyper (CEO) 01/03/2022 43.4821 10,090 Christophe Boizard (CFO) 01/03/2022 43.4821 7,529 Emmanuel Van Grimbergen (CRO) 01/03/2022 43.4821 7,529 Antonio Cano (MD Europe) 01/03/2022 43.4821 7,529 Filip Coremans (MD Asia) 01/03/2022 43.4821 7,529 Total 40,206 2021 vesting The 2017- LTI plan vested on 30 June 2021. According the terms and conditions of the LTI Plan 2017, the initial number of Ageas shares committed to be granted was adjusted based on the relative TSR performance of Ageas within a predefined peer group of companies which was top quartile. In any case the total shares attributed at vesting can never exceed an amount of shares equal to 90% of base compensation/ageas share price at initial grant. . The table below gives an overview of the number of vested shares for each member of the ExCo: Number of shares Adjusted Number of Number of committed to be number vested shares sold to shares blocked Incumbent Name granted for 2017 on 30 June 2021 finance income tax till 1 January 2023 Hans De Cuyper (1) 5,973 5,973 2,924 3,049 Christophe Boizard 9,715 9,715 4,756 4,959 Emmanuel Van Grimbergen (2) 4,430 4,430 2,169 2,261 Antonio Cano 9,715 9,715 4,756 4,959 Filip Coremans 9,715 9,715 4,756 4,959 Total 39,548 39,548 19,361 20,187 (1) Relates to restricted shares awarded in the role of CEO AG Insurance. (2) Relates to restricted shares awarded in the role of Group Risk officer. C. EXTRAORDINARY ITEMS AND PENSION EXPENSES. A total aggregated amount of EUR 926,244 was contributed to a defined contribution pension plan for the Executive Committee members. Incumbent Name Pension Contribution Hans De Cuyper 171,504 Christophe Boizard 196,890 Emmanuel Van Grimbergen 161,352 Antonio Cano 197,691 Filip Coremans 198,807 Total 926,244 169 Ageas Annual Report 2021 170 | 240 6.3.2.3 Share-based Remuneration As mentioned above, the LTI-plan was granted at 150% of the target, which resulted in the grant of 40,206 shares for an amount of EUR 1,748,250. The table below gives an overview of the number of shares granted in previous years. These shares only vest on 30 June of N+4 and are adjusted taking into account the relative TSR-performance over the performance period. Number of shares Number of shares Number of shares Number of shares committed to be committed to be committed to be committed to be Incumbent name granted for 2018 granted for 2019 granted for 2020 granted for 2021 Bart De Smet 6,941 9,790 8,617 0 Hans De Cuyper (1) 2,954 4,196 5,293 10,090 Christophe Boizard 4,805 6,783 7,165 7,529 Emmanuel Van Grimbergen (2) 2,228 4,504 5,909 7,529 Antonio Cano 4,805 6,783 7,165 7,529 Filip Coremans 4,805 6,783 7,165 7,529 Total 26,538 38,839 41,314 40,206 (1) Shares granted until 22 October 2020 relate to his mandate as CEO of AG Insurance. 1,600 shares for 2020 relate to the CEO Ageas function. (2) Shares granted until 1 June 2019 relate to his mandate as Group Risk Officer. 6.3.2.4 Shareholding requirement The ExCo members are subject to a shareholding requirement of 100% of gross base compensation. You find below the valuation of this shareholding requirement at 31/12/2021. In case the threshold is not met, the Exco member is restricted from selling shares which vest under the LTI- plan (excluding the sale of shares to cover taxes on vesting). Number Share price Value incumbent of shares at 31-12-2021 at 31-12-2021 Base salary Ratio Hans De Cuyper 6,145 45.55 279,905 650,000 43% Cristophe Boizard 26,548 45.55 1,209,261 485,000 249% Emmanuel Van Grimbergen 8,554 45.55 389,635 485,000 80% Antonio Cano 16,076 45.55 732,262 485,000 151% Filip Coremans 13,501 45.55 614,971 485,000 127% 6.3.2.5 Additional disclosure Ageas did not apply any clawback provision during the year under review. 6.3.2.6 Annual Change in Remuneration of Executive Directors versus the Wider Workforce & Company Performance The table below gives an overview of the evolution of the total remuneration of the ExCo members in comparison with the evolution of the average remuneration of employees. The pay ratio is expressed both for the CEO remuneration versus the average employee remuneration and versus the lowest employee remuneration at the level of ageas SA/NV. 171 | 240 Annual change 2017 Var 2018 Var 2019 Var 2020 Var 2021 Var Exco total remuneration (1) Hans De Cuyper (as of 22/10/2020) 0 0 0 292,097 1,736,678 Christophe Boizard 1,467,481 62% 1,161,803 (21%) 1,396,680 20% 1,419,062 2% 1,390,926 (2%) Filip Coremans 1,452,109 68% 1,144,313 (21%) 1,376,144 20% 1,405,707 2% 1,375,878 (2%) Antonio Cano 1,430,608 1,130,143 (21%) 1,381,156 22% 1,402,383 2% 1,373,483 (2%) Emmanuel Van Grimbergen (as of 01/06/2019) N/A N/A 619,993 1,090,275 1,320,567 21% Company performance Ageas Business score % (2) 182% 93% 130% 136% 116% TSR 01-01/31-12 of YR (3) 14.52% 1.21% 40.86% (10.70%) 10.00% Average remuneration of employees on full- time base 73,299 5% 73,512 0.3% 77,372 5.3% 83,029 7% 84,355 2% FTE at 31/12 (4) 11,261.0 11,009.0 10,741.5 10,044.7 10,100.2 Total staff expenses (5) 825,400,00 0 809,300,00 0 831,100,00 0 834,000,00 0 852,000,00 0 Pay ratio average remuneration to CEO remuneration (6) 29.0 22.7 26.0 24.1 20.6 Pay ratio lowest remuneration (7) to CEO remuneration (6) 40.1 33.4 (1) Total remuneration as defined in table for 6.3.2.2. . (2) Range is 0-200%. (3) Total Shareholder Return. (4) FTE for Ageas consolidated entities. (5) As reported in the annual accounts. (6) For comparison with previous years, CEO remuneration 2020 is calculated as the sum of total remuneration of B. De Smet and H. De Cuyper. (7) Salary in lowest salary band at the level of ageas SA/NV. GENERAL NOTES 170 Ageas Annual Report 2021 170 | 240 6.3.2.3 Share-based Remuneration As mentioned above, the LTI-plan was granted at 150% of the target, which resulted in the grant of 40,206 shares for an amount of EUR 1,748,250. The table below gives an overview of the number of shares granted in previous years. These shares only vest on 30 June of N+4 and are adjusted taking into account the relative TSR-performance over the performance period. Number of shares Number of shares Number of shares Number of shares committed to be committed to be committed to be committed to be Incumbent name granted for 2018 granted for 2019 granted for 2020 granted for 2021 Bart De Smet 6,941 9,790 8,617 0 Hans De Cuyper (1) 2,954 4,196 5,293 10,090 Christophe Boizard 4,805 6,783 7,165 7,529 Emmanuel Van Grimbergen (2) 2,228 4,504 5,909 7,529 Antonio Cano 4,805 6,783 7,165 7,529 Filip Coremans 4,805 6,783 7,165 7,529 Total 26,538 38,839 41,314 40,206 (1) Shares granted until 22 October 2020 relate to his mandate as CEO of AG Insurance. 1,600 shares for 2020 relate to the CEO Ageas function. (2) Shares granted until 1 June 2019 relate to his mandate as Group Risk Officer. 6.3.2.4 Shareholding requirement The ExCo members are subject to a shareholding requirement of 100% of gross base compensation. You find below the valuation of this shareholding requirement at 31/12/2021. In case the threshold is not met, the Exco member is restricted from selling shares which vest under the LTI- plan (excluding the sale of shares to cover taxes on vesting). Number Share price Value incumbent of shares at 31-12-2021 at 31-12-2021 Base salary Ratio Hans De Cuyper 6,145 45.55 279,905 650,000 43% Cristophe Boizard 26,548 45.55 1,209,261 485,000 249% Emmanuel Van Grimbergen 8,554 45.55 389,635 485,000 80% Antonio Cano 16,076 45.55 732,262 485,000 151% Filip Coremans 13,501 45.55 614,971 485,000 127% 6.3.2.5 Additional disclosure Ageas did not apply any clawback provision during the year under review. 6.3.2.6 Annual Change in Remuneration of Executive Directors versus the Wider Workforce & Company Performance The table below gives an overview of the evolution of the total remuneration of the ExCo members in comparison with the evolution of the average remuneration of employees. The pay ratio is expressed both for the CEO remuneration versus the average employee remuneration and versus the lowest employee remuneration at the level of ageas SA/NV. 171 | 240 Annual change 2017 Var 2018 Var 2019 Var 2020 Var 2021 Var Exco total remuneration (1) Hans De Cuyper (as of 22/10/2020) 0 0 0 292,097 1,736,678 Christophe Boizard 1,467,481 62% 1,161,803 (21%) 1,396,680 20% 1,419,062 2% 1,390,926 (2%) Filip Coremans 1,452,109 68% 1,144,313 (21%) 1,376,144 20% 1,405,707 2% 1,375,878 (2%) Antonio Cano 1,430,608 1,130,143 (21%) 1,381,156 22% 1,402,383 2% 1,373,483 (2%) Emmanuel Van Grimbergen (as of 01/06/2019) N/A N/A 619,993 1,090,275 1,320,567 21% Company performance Ageas Business score % (2) 182% 93% 130% 136% 116% TSR 01-01/31-12 of YR (3) 14.52% 1.21% 40.86% (10.70%) 10.00% Average remuneration of employees on full- time base 73,299 5% 73,512 0.3% 77,372 5.3% 83,029 7% 84,355 2% FTE at 31/12 (4) 11,261.0 11,009.0 10,741.5 10,044.7 10,100.2 Total staff expenses (5) 825,400,00 0 809,300,00 0 831,100,00 0 834,000,00 0 852,000,00 0 Pay ratio average remuneration to CEO remuneration (6) 29.0 22.7 26.0 24.1 20.6 Pay ratio lowest remuneration (7) to CEO remuneration (6) 40.1 33.4 (1) Total remuneration as defined in table for 6.3.2.2. . (2) Range is 0-200%. (3) Total Shareholder Return. (4) FTE for Ageas consolidated entities. (5) As reported in the annual accounts. (6) For comparison with previous years, CEO remuneration 2020 is calculated as the sum of total remuneration of B. De Smet and H. De Cuyper. (7) Salary in lowest salary band at the level of ageas SA/NV. 171 Ageas Annual Report 2021 172 | 240 The law of 28 April 2020 implementing Directive 2017/828 of the European Parliament and the Council (the Second Shareholder Rights Directive or SRD II) introduced a new regime for related party transactions, which is applicable to all the members of the Ageas group and entered into force on 16 May 2020. Among other elements, this new regime entails a reinforced obligation for Ageas to report on the application of the related party transactions procedure, both immediately upon occurrence of the transaction as well as in the annual report for the relevant financial year. Parties related to Ageas include associates and joint ventures, pension funds, Board Members (i.e. Non-Executive and Executive Members of the Ageas Board of Directors), executive managers, close family members of any individual referred to above, entities controlled or significantly influenced by any individual referred to above and other related entities. Ageas frequently enters into transactions with related parties in the course of its business operations. Such transactions mainly concern loans, deposits and reinsurance contracts and are entered into under the same commercial and market terms that apply to non-related parties. Ageas companies may grant credits, loans or guarantees in the normal course of business to Board Members and executive managers or to close family members of the Board Members or close family members of executive managers. As at 31 December 2021, no outstanding or new loans, credits or bank guarantees had been granted to Board Members and executive managers or to close family members of the Board members and close family members of executive managers. Hence, during financial year 2021, no transactions took place within the Ageas group which triggered the application of the procedure. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 7 Related parties 173 | 240 Transactions and outstanding balances between fully-consolidated entities of Ageas group are eliminated. The tables below show the outstanding balances with associates and joint ventures. 2021 2020 Income statement - related parties Interest income 13 12 Insurance premiums 42 21 Fee and commission income 6 6 Realised gains 15 Other income 6 4 Change in provision for insurance and investment contracts (26) (13) Fee and commission expenses (35) (25) 2021 2020 Statement of financial position - related parties Financial Investments 63 64 Reinsurance share, trade and other receivables 52 18 Related party loans 482 433 Other assets 2 2 Liabilities arising from insurance and investment contracts 45 18 Debt certificates, subordinated liabilities and other borrowings 4 Other liabilities 13 2 The changes in loans to related parties during the year ended 31 December are as follows. 2021 2020 Related party loans as at 1 January 433 391 Additions or advances 62 70 Repayments (13) (28) Related party loans as at 31 December 482 433 GENERAL NOTES 172 Ageas Annual Report 2021 Related parties 172 | 240 The law of 28 April 2020 implementing Directive 2017/828 of the European Parliament and the Council (the Second Shareholder Rights Directive or SRD II) introduced a new regime for related party transactions, which is applicable to all the members of the Ageas group and entered into force on 16 May 2020. Among other elements, this new regime entails a reinforced obligation for Ageas to report on the application of the related party transactions procedure, both immediately upon occurrence of the transaction as well as in the annual report for the relevant financial year. Parties related to Ageas include associates and joint ventures, pension funds, Board Members (i.e. Non-Executive and Executive Members of the Ageas Board of Directors), executive managers, close family members of any individual referred to above, entities controlled or significantly influenced by any individual referred to above and other related entities. Ageas frequently enters into transactions with related parties in the course of its business operations. Such transactions mainly concern loans, deposits and reinsurance contracts and are entered into under the same commercial and market terms that apply to non-related parties. Ageas companies may grant credits, loans or guarantees in the normal course of business to Board Members and executive managers or to close family members of the Board Members or close family members of executive managers. As at 31 December 2021, no outstanding or new loans, credits or bank guarantees had been granted to Board Members and executive managers or to close family members of the Board members and close family members of executive managers. Hence, during financial year 2021, no transactions took place within the Ageas group which triggered the application of the procedure. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 7 Related parties 173 | 240 Transactions and outstanding balances between fully-consolidated entities of Ageas group are eliminated. The tables below show the outstanding balances with associates and joint ventures. 2021 2020 Income statement - related parties Interest income 13 12 Insurance premiums 42 21 Fee and commission income 6 6 Realised gains 15 Other income 6 4 Change in provision for insurance and investment contracts (26) (13) Fee and commission expenses (35) (25) 2021 2020 Statement of financial position - related parties Financial Investments 63 64 Reinsurance share, trade and other receivables 52 18 Related party loans 482 433 Other assets 2 2 Liabilities arising from insurance and investment contracts 45 18 Debt certificates, subordinated liabilities and other borrowings 4 Other liabilities 13 2 The changes in loans to related parties during the year ended 31 December are as follows. 2021 2020 Related party loans as at 1 January 433 391 Additions or advances 62 70 Repayments (13) (28) Related party loans as at 31 December 482 433 173 Ageas Annual Report 2021 174 | 240 8.1 General information Operating segments Ageas is organised in six operating segments:  Belgium;  United Kingdom (UK);  Continental Europe (CEU);  Asia;  Reinsurance; and  General Account. Ageas has decided that the most appropriate way of reporting operating segments under IFRS is per region in which Ageas operates, i.e. Belgium, United Kingdom, Continental Europe, Asia and Reinsurance. In addition, Ageas reports activities that are not related to the core insurance business, such as Group financing and other holding activities, in the General Account, which is treated as a separate operating segment. This segment approach is consistent with the scopes of management responsibilities. Transactions between the different businesses are executed under standard commercial terms and conditions. Allocation rules In accordance with Ageas’s business model, insurance companies report support activities directly in their operating segments. When allocating items from the statement of financial position to operating segments, a bottom-up approach is used based on the products sold to external customers. For the items in the statement of financial position not related to products sold to customers, a tailor-made methodology adapted to the specific business model of each reportable segment is applied. 8.2 Belgium The Belgian insurance activities, operating under the name of AG Insurance, have a longstanding history. AG Insurance is also 100% owner of AG Real Estate, which manages AG’s real estate activities. AG Insurance targets private individuals as well as small, medium-sized and large companies. It offers its customers a comprehensive range of Life and Non-life insurance through various channels such as independent brokers and via the bank channels of BNP Paribas Fortis SA/NV and its subsidiaries. AG Employee Benefits is the dedicated business unit offering group pension and health care solutions, mainly to larger enterprises. 8.3 United Kingdom (UK) Ageas’s UK business is one of the established general insurers in the UK, adopting a multi-channel distribution strategy across brokers, affinity partners and direct distribution. The vision is to profitably grow in the UK general insurance market through the delivery of a wide range of insurance solutions, focusing on personal lines and commercial lines. 8.4 Continental Europe Continental Europe consists of the insurance activities of Ageas in Europe, excluding Belgium and the United Kingdom. Ageas is active in three markets: Portugal, France and Turkey. The product range includes Life (in Portugal and France) and Non-life (in Portugal and Turkey). Access to markets is facilitated by a number of key partnerships with companies having a sizeable position in their respective markets. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 8 Information on operating segments 175 | 240 8.5 Asia Ageas is active in a number of countries in Asia with its regional office based in Hong Kong. The activities are organised in the form of joint ventures with leading local partners and financial institutions in China, Malaysia, Thailand, India, The Philippines and Vietnam. These activities are accounted for as equity associates under IFRS. 8.6 Reinsurance In June 2018, ageas SA/NV received a license from the National Bank of Belgium to start reinsurance activities. For Group reporting purposes, the reinsurance activities of ageas SA/NV are reported in the Reinsurance Segment while the existing activities remain in the General Account. 8.7 General Account The General Account comprises activities not related to the core insurance business, such as Group financing and other holding activities. In addition, General Account also includes the investment in Royal Park Investments and the liability related to RPN(I). 8.8 Statement of financial position by operating segment Insurance Total General Group 31 December 2021 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Assets Cash and cash equivalents 655 168 237 4 149 1,213 724 1,937 Financial investments 47,331 1,459 9,702 1,458 59,950 5 (3) 59,952 Investment property 2,850 268 (1) 3,117 3,117 Loans 13,582 37 344 85 (1) 14,047 1,315 (870) 14,492 Investments related to unit-linked contracts 12,387 6,512 18,899 18,899 Equity accounted investments 370 146 4,811 5,327 2 (1) 5,328 Reinsurance and other receivables 1,353 1,690 429 9 151 (1,575) 2,057 203 (111) 2,149 Current tax assets 19 2 32 53 53 Deferred tax assets 18 29 53 100 100 Accrued interest and other assets 1,493 159 195 153 (13) 1,987 154 (102) 2,039 Property, plant and equipment 1,612 75 35 2 1,724 8 1,732 Goodwill and other intangible assets 604 269 449 1,322 1,322 Assets held for sale 19 19 19 Total assets 82,293 3,888 18,402 4,826 1,996 (1,590) 109,815 2,411 (1,087) 111,139 Liabilities Liabilities arising from Life insurance contracts 25,008 3,669 13 (2) 28,688 (15) 28,673 Liabilities arising from Life investment contracts 25,609 5,008 30,617 30,617 Liabilities related to unit-linked contracts 12,387 6,515 (1) 18,901 18,901 Liabilities arising from Non-life insurance contracts 4,345 2,605 844 1,643 (1,548) 7,889 7,889 Subordinated liabilities 1,143 142 175 1,460 2,118 (830) 2,748 Borrowings 3,608 6 39 2 (5) 3,650 6 (40) 3,616 Current tax liabilities 33 1 (18) 16 16 Deferred tax liabilities 878 1 76 1 956 15 971 RPN(I) 520 520 Accrued interest and other liabilities 2,250 170 339 9 170 (35) 2,903 131 (200) 2,834 Provisions 38 24 6 68 114 182 Total liabilities 75,299 2,949 16,653 11 1,826 (1,590) 95,148 2,904 (1,085) 96,967 Shareholders' equity 5,025 939 1,461 4,815 170 3 12,413 (493) (6) 11,914 Non-controlling interests 1,969 288 (3) 2,254 4 2,258 Total equity 6,994 939 1,749 4,815 170 14,667 (493) (2) 14,172 Total liabilities and equity 82,293 3,888 18,402 4,826 1,996 (1,590) 109,815 2,411 (1,087) 111,139 Number of employees 6,111 2,089 1,663 69 9,932 169 10,101 GENERAL NOTES 174 Ageas Annual Report 2021 Information on operating segments 174 | 240 8.1 General information Operating segments Ageas is organised in six operating segments:  Belgium;  United Kingdom (UK);  Continental Europe (CEU);  Asia;  Reinsurance; and  General Account. Ageas has decided that the most appropriate way of reporting operating segments under IFRS is per region in which Ageas operates, i.e. Belgium, United Kingdom, Continental Europe, Asia and Reinsurance. In addition, Ageas reports activities that are not related to the core insurance business, such as Group financing and other holding activities, in the General Account, which is treated as a separate operating segment. This segment approach is consistent with the scopes of management responsibilities. Transactions between the different businesses are executed under standard commercial terms and conditions. Allocation rules In accordance with Ageas’s business model, insurance companies report support activities directly in their operating segments. When allocating items from the statement of financial position to operating segments, a bottom-up approach is used based on the products sold to external customers. For the items in the statement of financial position not related to products sold to customers, a tailor-made methodology adapted to the specific business model of each reportable segment is applied. 8.2 Belgium The Belgian insurance activities, operating under the name of AG Insurance, have a longstanding history. AG Insurance is also 100% owner of AG Real Estate, which manages AG’s real estate activities. AG Insurance targets private individuals as well as small, medium-sized and large companies. It offers its customers a comprehensive range of Life and Non-life insurance through various channels such as independent brokers and via the bank channels of BNP Paribas Fortis SA/NV and its subsidiaries. AG Employee Benefits is the dedicated business unit offering group pension and health care solutions, mainly to larger enterprises. 8.3 United Kingdom (UK) Ageas’s UK business is one of the established general insurers in the UK, adopting a multi-channel distribution strategy across brokers, affinity partners and direct distribution. The vision is to profitably grow in the UK general insurance market through the delivery of a wide range of insurance solutions, focusing on personal lines and commercial lines. 8.4 Continental Europe Continental Europe consists of the insurance activities of Ageas in Europe, excluding Belgium and the United Kingdom. Ageas is active in three markets: Portugal, France and Turkey. The product range includes Life (in Portugal and France) and Non-life (in Portugal and Turkey). Access to markets is facilitated by a number of key partnerships with companies having a sizeable position in their respective markets. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 8 Information on operating segments 175 | 240 8.5 Asia Ageas is active in a number of countries in Asia with its regional office based in Hong Kong. The activities are organised in the form of joint ventures with leading local partners and financial institutions in China, Malaysia, Thailand, India, The Philippines and Vietnam. These activities are accounted for as equity associates under IFRS. 8.6 Reinsurance In June 2018, ageas SA/NV received a license from the National Bank of Belgium to start reinsurance activities. For Group reporting purposes, the reinsurance activities of ageas SA/NV are reported in the Reinsurance Segment while the existing activities remain in the General Account. 8.7 General Account The General Account comprises activities not related to the core insurance business, such as Group financing and other holding activities. In addition, General Account also includes the investment in Royal Park Investments and the liability related to RPN(I). 8.8 Statement of financial position by operating segment Insurance Total General Group 31 December 2021 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Assets Cash and cash equivalents 655 168 237 4 149 1,213 724 1,937 Financial investments 47,331 1,459 9,702 1,458 59,950 5 (3) 59,952 Investment property 2,850 268 (1) 3,117 3,117 Loans 13,582 37 344 85 (1) 14,047 1,315 (870) 14,492 Investments related to unit-linked contracts 12,387 6,512 18,899 18,899 Equity accounted investments 370 146 4,811 5,327 2 (1) 5,328 Reinsurance and other receivables 1,353 1,690 429 9 151 (1,575) 2,057 203 (111) 2,149 Current tax assets 19 2 32 53 53 Deferred tax assets 18 29 53 100 100 Accrued interest and other assets 1,493 159 195 153 (13) 1,987 154 (102) 2,039 Property, plant and equipment 1,612 75 35 2 1,724 8 1,732 Goodwill and other intangible assets 604 269 449 1,322 1,322 Assets held for sale 19 19 19 Total assets 82,293 3,888 18,402 4,826 1,996 (1,590) 109,815 2,411 (1,087) 111,139 Liabilities Liabilities arising from Life insurance contracts 25,008 3,669 13 (2) 28,688 (15) 28,673 Liabilities arising from Life investment contracts 25,609 5,008 30,617 30,617 Liabilities related to unit-linked contracts 12,387 6,515 (1) 18,901 18,901 Liabilities arising from Non-life insurance contracts 4,345 2,605 844 1,643 (1,548) 7,889 7,889 Subordinated liabilities 1,143 142 175 1,460 2,118 (830) 2,748 Borrowings 3,608 6 39 2 (5) 3,650 6 (40) 3,616 Current tax liabilities 33 1 (18) 16 16 Deferred tax liabilities 878 1 76 1 956 15 971 RPN(I) 520 520 Accrued interest and other liabilities 2,250 170 339 9 170 (35) 2,903 131 (200) 2,834 Provisions 38 24 6 68 114 182 Total liabilities 75,299 2,949 16,653 11 1,826 (1,590) 95,148 2,904 (1,085) 96,967 Shareholders' equity 5,025 939 1,461 4,815 170 3 12,413 (493) (6) 11,914 Non-controlling interests 1,969 288 (3) 2,254 4 2,258 Total equity 6,994 939 1,749 4,815 170 14,667 (493) (2) 14,172 Total liabilities and equity 82,293 3,888 18,402 4,826 1,996 (1,590) 109,815 2,411 (1,087) 111,139 Number of employees 6,111 2,089 1,663 69 9,932 169 10,101 175 Ageas Annual Report 2021 176 | 240 Insurance Total General Group 31 December 2020 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Assets Cash and cash equivalents 811 163 333 4 40 (1) 1,350 891 2,241 Financial investments 50,428 1,420 10,480 1,379 1 63,708 5 (3) 63,710 Investment property 2,662 226 1 2,889 2,889 Loans 12,690 25 306 57 13,078 1,165 (845) 13,398 Investments related to unit-linked contracts 10,654 6,434 17,088 17,088 Equity accounted investments 376 71 4,478 (1) 4,924 4 1 4,929 Reinsurance and other receivables 1,123 1,564 430 1 65 (1,435) 1,748 310 (97) 1,961 Current tax assets 15 2 32 49 49 Deferred tax assets 10 29 60 (1) 98 98 Accrued interest and other assets 1,350 135 209 182 (17) 1,859 127 (101) 1,885 Property, plant and equipment 1,708 73 35 2 1 1,819 8 1,827 Goodwill and other intangible assets 523 248 447 (1) 1,217 12 1,229 Assets held for sale 109 5 114 114 Total assets 82,350 3,768 19,068 4,485 1,723 (1,453) 109,941 2,522 (1,045) 111,418 Liabilities Liabilities arising from Life insurance contracts 26,070 3,912 7 (2) 29,987 (14) 29,973 Liabilities arising from Life investment contracts 26,155 5,474 31,629 31,629 Liabilities related to unit-linked contracts 10,654 6,436 17,090 17,090 Liabilities arising from Non-life insurance contracts 4,086 2,427 843 1,388 (1,340) 7,404 7,404 Subordinated liabilities 1,142 157 175 1,474 2,128 (844) 2,758 Borrowings 3,878 7 45 2 (19) 3,913 7 3,920 Current tax liabilities 51 38 89 89 Deferred tax liabilities 996 2 92 (1) 1,089 16 1,105 RPN(I) 420 420 Accrued interest and other liabilities 2,329 147 380 8 208 (91) 2,981 139 (186) 2,934 Provisions 43 25 7 75 247 322 Total liabilities 75,404 2,765 17,402 10 1,603 (1,453) 95,731 2,957 (1,044) 97,644 Shareholders' equity 4,987 1,003 1,406 4,475 120 1 11,992 (435) (2) 11,555 Non-controlling interests 1,959 260 (1) 2,218 1 2,219 Total equity 6,946 1,003 1,666 4,475 120 14,210 (435) (1) 13,774 Total liabilities and equity 82,350 3,768 19,068 4,485 1,723 (1,453) 109,941 2,522 (1,045) 111,418 Number of employees 5,785 2,431 1,599 65 9,880 165 10,045 177 | 240 8.9 Income statement by operating segment Insurance Total General Group 2021 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Income - Gross premium income 5,748 1,406 1,775 1,623 (1,571) 8,981 (2) 8,979 - Change in unearned premiums (8) 30 (8) (61) 62 15 (1) 14 - Ceded earned premiums (806) (646) (404) (83) 1,479 (460) (460) Net earned premiums 4,934 790 1,363 1,479 (30) 8,536 (3) 8,533 Interest, dividend and other investment income 2,186 38 181 21 2,426 38 (37) 2,427 Unrealised gain (loss) on RPN(I) (101) (101) Result on sales and revaluations 240 12 41 3 296 (4) 2 294 Income related to investments for unit-linked contracts 1,062 344 1,406 1,406 Share in result of equity accounted investments 14 21 429 (1) 463 1 464 Fee and commission income 506 219 269 7 (534) 467 467 Other income 234 33 30 (1) 296 8 (22) 282 Total income 9,176 1,092 2,249 429 1,510 (566) 13,890 (58) (60) 13,772 Expenses - Insurance claims and benefits, gross (5,574) (826) (1,295) (892) 827 (7,760) 3 (7,757) - Insurance claims and benefits, ceded 513 357 182 35 (801) 286 286 Insurance claims and benefits, net (5,061) (469) (1,113) (857) 26 (7,474) 3 (7,471) Charges related to unit-linked contracts (1,167) (405) (1,572) (1,572) Financing costs (88) (7) (11) (1) 1 (106) (68) 36 (138) Change in impairments (38) (3) (41) (41) Change in provisions 2 2 13 15 Fee and commission expenses (718) (247) (225) (558) 535 (1,213) (1,213) Staff expenses (560) (127) (110) (22) (2) 0 (821) (35) 4 (852) Other expenses (872) (180) (171) (4) (5) 4 (1,228) (60) 19 (1,269) Total expenses (8,502) (1,030) (2,038) (26) (1,423) 566 (12,453) (150) 62 (12,541) Result before taxation 674 62 211 403 87 1,437 (208) 2 1,231 Tax income (expenses) (136) (1) (58) (1) (196) (19) (215) Net result for the period 538 61 153 403 87 (1) 1,241 (227) 2 1,016 Attributable to non-controlling interests 138 34 (1) 171 171 Net result attributable to shareholders 400 61 119 403 87 1,070 (227) 2 845 Total income from external customers 9,502 1,475 2,462 429 0 13,868 (96) 13,772 Total income internal (326) (383) (213) 1,510 (566) 22 38 (60) Total income 9,176 1,092 2,249 429 1,510 (566) 13,890 (58) (60) 13,772 Gross inflow (sum of gross written premiums and premium inflow from investment contracts without discretionary participation features) can be presented as follows. Insurance Total General Group 2021 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Gross premium income 5,748 1,406 1,775 1,623 (1,571) 8,981 (2) 8,979 Inflow deposit accounting 927 900 (1) 1,826 1,826 Gross inflow 6,675 1,406 2,675 1,623 (1,572) 10,807 (2) 10,805 GENERAL NOTES 176 Ageas Annual Report 2021 176 | 240 Insurance Total General Group 31 December 2020 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Assets Cash and cash equivalents 811 163 333 4 40 (1) 1,350 891 2,241 Financial investments 50,428 1,420 10,480 1,379 1 63,708 5 (3) 63,710 Investment property 2,662 226 1 2,889 2,889 Loans 12,690 25 306 57 13,078 1,165 (845) 13,398 Investments related to unit-linked contracts 10,654 6,434 17,088 17,088 Equity accounted investments 376 71 4,478 (1) 4,924 4 1 4,929 Reinsurance and other receivables 1,123 1,564 430 1 65 (1,435) 1,748 310 (97) 1,961 Current tax assets 15 2 32 49 49 Deferred tax assets 10 29 60 (1) 98 98 Accrued interest and other assets 1,350 135 209 182 (17) 1,859 127 (101) 1,885 Property, plant and equipment 1,708 73 35 2 1 1,819 8 1,827 Goodwill and other intangible assets 523 248 447 (1) 1,217 12 1,229 Assets held for sale 109 5 114 114 Total assets 82,350 3,768 19,068 4,485 1,723 (1,453) 109,941 2,522 (1,045) 111,418 Liabilities Liabilities arising from Life insurance contracts 26,070 3,912 7 (2) 29,987 (14) 29,973 Liabilities arising from Life investment contracts 26,155 5,474 31,629 31,629 Liabilities related to unit-linked contracts 10,654 6,436 17,090 17,090 Liabilities arising from Non-life insurance contracts 4,086 2,427 843 1,388 (1,340) 7,404 7,404 Subordinated liabilities 1,142 157 175 1,474 2,128 (844) 2,758 Borrowings 3,878 7 45 2 (19) 3,913 7 3,920 Current tax liabilities 51 38 89 89 Deferred tax liabilities 996 2 92 (1) 1,089 16 1,105 RPN(I) 420 420 Accrued interest and other liabilities 2,329 147 380 8 208 (91) 2,981 139 (186) 2,934 Provisions 43 25 7 75 247 322 Total liabilities 75,404 2,765 17,402 10 1,603 (1,453) 95,731 2,957 (1,044) 97,644 Shareholders' equity 4,987 1,003 1,406 4,475 120 1 11,992 (435) (2) 11,555 Non-controlling interests 1,959 260 (1) 2,218 1 2,219 Total equity 6,946 1,003 1,666 4,475 120 14,210 (435) (1) 13,774 Total liabilities and equity 82,350 3,768 19,068 4,485 1,723 (1,453) 109,941 2,522 (1,045) 111,418 Number of employees 5,785 2,431 1,599 65 9,880 165 10,045 177 | 240 8.9 Income statement by operating segment Insurance Total General Group 2021 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Income - Gross premium income 5,748 1,406 1,775 1,623 (1,571) 8,981 (2) 8,979 - Change in unearned premiums (8) 30 (8) (61) 62 15 (1) 14 - Ceded earned premiums (806) (646) (404) (83) 1,479 (460) (460) Net earned premiums 4,934 790 1,363 1,479 (30) 8,536 (3) 8,533 Interest, dividend and other investment income 2,186 38 181 21 2,426 38 (37) 2,427 Unrealised gain (loss) on RPN(I) (101) (101) Result on sales and revaluations 240 12 41 3 296 (4) 2 294 Income related to investments for unit-linked contracts 1,062 344 1,406 1,406 Share in result of equity accounted investments 14 21 429 (1) 463 1 464 Fee and commission income 506 219 269 7 (534) 467 467 Other income 234 33 30 (1) 296 8 (22) 282 Total income 9,176 1,092 2,249 429 1,510 (566) 13,890 (58) (60) 13,772 Expenses - Insurance claims and benefits, gross (5,574) (826) (1,295) (892) 827 (7,760) 3 (7,757) - Insurance claims and benefits, ceded 513 357 182 35 (801) 286 286 Insurance claims and benefits, net (5,061) (469) (1,113) (857) 26 (7,474) 3 (7,471) Charges related to unit-linked contracts (1,167) (405) (1,572) (1,572) Financing costs (88) (7) (11) (1) 1 (106) (68) 36 (138) Change in impairments (38) (3) (41) (41) Change in provisions 2 2 13 15 Fee and commission expenses (718) (247) (225) (558) 535 (1,213) (1,213) Staff expenses (560) (127) (110) (22) (2) 0 (821) (35) 4 (852) Other expenses (872) (180) (171) (4) (5) 4 (1,228) (60) 19 (1,269) Total expenses (8,502) (1,030) (2,038) (26) (1,423) 566 (12,453) (150) 62 (12,541) Result before taxation 674 62 211 403 87 1,437 (208) 2 1,231 Tax income (expenses) (136) (1) (58) (1) (196) (19) (215) Net result for the period 538 61 153 403 87 (1) 1,241 (227) 2 1,016 Attributable to non-controlling interests 138 34 (1) 171 171 Net result attributable to shareholders 400 61 119 403 87 1,070 (227) 2 845 Total income from external customers 9,502 1,475 2,462 429 0 13,868 (96) 13,772 Total income internal (326) (383) (213) 1,510 (566) 22 38 (60) Total income 9,176 1,092 2,249 429 1,510 (566) 13,890 (58) (60) 13,772 Gross inflow (sum of gross written premiums and premium inflow from investment contracts without discretionary participation features) can be presented as follows. Insurance Total General Group 2021 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Gross premium income 5,748 1,406 1,775 1,623 (1,571) 8,981 (2) 8,979 Inflow deposit accounting 927 900 (1) 1,826 1,826 Gross inflow 6,675 1,406 2,675 1,623 (1,572) 10,807 (2) 10,805 177 Ageas Annual Report 2021 178 | 240 Insurance Total General Group 2020 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Income - Gross premium income 5,428 1,382 1,598 1,641 (1,611) 8,438 (3) 8,435 - Change in unearned premiums (7) (10) (3) (45) 43 (22) (22) - Ceded earned premiums (733) (760) (433) (55) 1,570 (411) (411) Net earned premiums 4,688 612 1,162 1,541 2 8,005 (3) 8,002 Interest, dividend and other investment income 2,131 38 202 21 (1) 2,391 39 (38) 2,392 Unrealised gain (loss) on RPN(I) (61) (61) Result on sales and revaluations 267 26 1 (1) 293 340 6 639 Income related to investments for unit-linked contracts 359 125 484 484 Share in result of equity accounted investments 1 14 16 295 326 2 328 Fee and commission income 437 240 236 4 (532) 385 385 Other income 160 34 19 (1) 212 7 (18) 201 Total income 8,043 938 1,786 295 1,567 (533) 12,096 327 (53) 12,370 Expenses - Insurance claims and benefits, gross (5,088) (771) (1,094) (1,000) 985 (6,968) 2 (6,966) - Insurance claims and benefits, ceded 385 476 239 36 (985) 151 151 Insurance claims and benefits, net (4,703) (295) (855) (964) (6,817) 2 (6,815) Charges related to unit-linked contracts (420) (191) 1 (610) (610) Financing costs (92) (9) (12) (1) (114) (63) 38 (139) Change in impairments (145) (26) (1) (172) (172) Change in provisions (8) (8) 44 36 Fee and commission expenses (668) (253) (204) (547) 534 (1,138) (1,138) Staff expenses (549) (132) (100) (23) (1) 0 (805) (32) 3 (834) Other expenses (783) (179) (157) (3) 25 (1) (1,098) (82) 15 (1,165) Total expenses (7,368) (868) (1,545) (26) (1,488) 533 (10,762) (133) 58 (10,837) Result before taxation 675 70 241 269 79 1,334 194 5 1,533 Tax income (expenses) (143) (5) (66) (214) (19) (233) Net result for the period 532 65 175 269 79 1,120 175 5 1,300 Attributable to non-controlling interests 121 39 (1) 159 159 Net result attributable to shareholders 411 65 136 269 79 1 961 175 5 1,141 Total income from external customers 8,345 1,413 2,031 294 0 12,083 287 12,370 Total income internal (302) (475) (245) 1 1,567 (533) 13 40 (53) Total income 8,043 938 1,786 295 1,567 (533) 12,096 327 (53) 12,370 Gross inflow (sum of gross written premiums and premium inflow from investment contracts without discretionary participation features) can be presented as follows. Insurance Total General Group 2020 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Gross premium income 5,428 1,382 1,598 1,641 (1,611) 8,438 (3) 8,435 Inflow deposit accounting 672 385 1,057 1,057 Gross inflow 6,100 1,382 1,983 1,641 (1,611) 9,495 (3) 9,492 179 | 240 8.10 Statement of financial position split into Life and Non-life Insurance Total General Group 31 December 2021 Life Non-life Eliminations Insurance Account Eliminations Total Assets Cash and cash equivalents 773 440 1,213 724 1,937 Financial investments 52,720 7,229 1 59,950 5 (3) 59,952 Investment property 2,908 209 3,117 3,117 Loans 12,704 1,382 (39) 14,047 1,315 (870) 14,492 Investments related to unit-linked contracts 18,899 18,899 18,899 Equity accounted investments 4,535 792 5,327 2 (1) 5,328 Reinsurance and other receivables 457 1,959 (359) 2,057 203 (111) 2,149 Current tax assets 23 30 53 53 Deferred tax assets 42 58 100 100 Accrued interest and other assets 1,153 836 (2) 1,987 154 (102) 2,039 Property, plant and equipment 1,411 314 (1) 1,724 8 1,732 Goodwill and other intangible assets 968 353 1 1,322 1,322 Assets held for sale 17 1 1 19 19 Total assets 96,610 13,603 (398) 109,815 2,411 (1,087) 111,139 Liabilities Liabilities arising from Life insurance contracts 28,688 28,688 (15) 28,673 Liabilities arising from Life investment contracts 30,617 30,617 30,617 Liabilities related to unit-linked contracts 18,901 18,901 18,901 Liabilities arising from Non-life insurance contracts 7,889 7,889 7,889 Subordinated liabilities 1,101 399 (40) 1,460 2,118 (830) 2,748 Borrowings 3,269 381 3,650 6 (40) 3,616 Current tax liabilities 7 9 16 16 Deferred tax liabilities 768 188 956 15 971 RPN(I) 520 520 Accrued interest and other liabilities 2,239 1,021 (357) 2,903 131 (200) 2,834 Provisions 29 39 68 114 182 Total liabilities 85,619 9,926 (397) 95,148 2,904 (1,085) 96,967 Shareholders' equity 9,076 3,338 (1) 12,413 (493) (6) 11,914 Non-controlling interests 1,915 339 2,254 4 2,258 Total equity 10,991 3,677 (1) 14,667 (493) (2) 14,172 Total liabilities and equity 96,610 13,603 (398) 109,815 2,411 (1,087) 111,139 Number of employees 3,969 5,962 9,932 169 10,101 GENERAL NOTES 178 Ageas Annual Report 2021 178 | 240 Insurance Total General Group 2020 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Income - Gross premium income 5,428 1,382 1,598 1,641 (1,611) 8,438 (3) 8,435 - Change in unearned premiums (7) (10) (3) (45) 43 (22) (22) - Ceded earned premiums (733) (760) (433) (55) 1,570 (411) (411) Net earned premiums 4,688 612 1,162 1,541 2 8,005 (3) 8,002 Interest, dividend and other investment income 2,131 38 202 21 (1) 2,391 39 (38) 2,392 Unrealised gain (loss) on RPN(I) (61) (61) Result on sales and revaluations 267 26 1 (1) 293 340 6 639 Income related to investments for unit-linked contracts 359 125 484 484 Share in result of equity accounted investments 1 14 16 295 326 2 328 Fee and commission income 437 240 236 4 (532) 385 385 Other income 160 34 19 (1) 212 7 (18) 201 Total income 8,043 938 1,786 295 1,567 (533) 12,096 327 (53) 12,370 Expenses - Insurance claims and benefits, gross (5,088) (771) (1,094) (1,000) 985 (6,968) 2 (6,966) - Insurance claims and benefits, ceded 385 476 239 36 (985) 151 151 Insurance claims and benefits, net (4,703) (295) (855) (964) (6,817) 2 (6,815) Charges related to unit-linked contracts (420) (191) 1 (610) (610) Financing costs (92) (9) (12) (1) (114) (63) 38 (139) Change in impairments (145) (26) (1) (172) (172) Change in provisions (8) (8) 44 36 Fee and commission expenses (668) (253) (204) (547) 534 (1,138) (1,138) Staff expenses (549) (132) (100) (23) (1) 0 (805) (32) 3 (834) Other expenses (783) (179) (157) (3) 25 (1) (1,098) (82) 15 (1,165) Total expenses (7,368) (868) (1,545) (26) (1,488) 533 (10,762) (133) 58 (10,837) Result before taxation 675 70 241 269 79 1,334 194 5 1,533 Tax income (expenses) (143) (5) (66) (214) (19) (233) Net result for the period 532 65 175 269 79 1,120 175 5 1,300 Attributable to non-controlling interests 121 39 (1) 159 159 Net result attributable to shareholders 411 65 136 269 79 1 961 175 5 1,141 Total income from external customers 8,345 1,413 2,031 294 0 12,083 287 12,370 Total income internal (302) (475) (245) 1 1,567 (533) 13 40 (53) Total income 8,043 938 1,786 295 1,567 (533) 12,096 327 (53) 12,370 Gross inflow (sum of gross written premiums and premium inflow from investment contracts without discretionary participation features) can be presented as follows. Insurance Total General Group 2020 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Gross premium income 5,428 1,382 1,598 1,641 (1,611) 8,438 (3) 8,435 Inflow deposit accounting 672 385 1,057 1,057 Gross inflow 6,100 1,382 1,983 1,641 (1,611) 9,495 (3) 9,492 179 | 240 8.10 Statement of financial position split into Life and Non-life Insurance Total General Group 31 December 2021 Life Non-life Eliminations Insurance Account Eliminations Total Assets Cash and cash equivalents 773 440 1,213 724 1,937 Financial investments 52,720 7,229 1 59,950 5 (3) 59,952 Investment property 2,908 209 3,117 3,117 Loans 12,704 1,382 (39) 14,047 1,315 (870) 14,492 Investments related to unit-linked contracts 18,899 18,899 18,899 Equity accounted investments 4,535 792 5,327 2 (1) 5,328 Reinsurance and other receivables 457 1,959 (359) 2,057 203 (111) 2,149 Current tax assets 23 30 53 53 Deferred tax assets 42 58 100 100 Accrued interest and other assets 1,153 836 (2) 1,987 154 (102) 2,039 Property, plant and equipment 1,411 314 (1) 1,724 8 1,732 Goodwill and other intangible assets 968 353 1 1,322 1,322 Assets held for sale 17 1 1 19 19 Total assets 96,610 13,603 (398) 109,815 2,411 (1,087) 111,139 Liabilities Liabilities arising from Life insurance contracts 28,688 28,688 (15) 28,673 Liabilities arising from Life investment contracts 30,617 30,617 30,617 Liabilities related to unit-linked contracts 18,901 18,901 18,901 Liabilities arising from Non-life insurance contracts 7,889 7,889 7,889 Subordinated liabilities 1,101 399 (40) 1,460 2,118 (830) 2,748 Borrowings 3,269 381 3,650 6 (40) 3,616 Current tax liabilities 7 9 16 16 Deferred tax liabilities 768 188 956 15 971 RPN(I) 520 520 Accrued interest and other liabilities 2,239 1,021 (357) 2,903 131 (200) 2,834 Provisions 29 39 68 114 182 Total liabilities 85,619 9,926 (397) 95,148 2,904 (1,085) 96,967 Shareholders' equity 9,076 3,338 (1) 12,413 (493) (6) 11,914 Non-controlling interests 1,915 339 2,254 4 2,258 Total equity 10,991 3,677 (1) 14,667 (493) (2) 14,172 Total liabilities and equity 96,610 13,603 (398) 109,815 2,411 (1,087) 111,139 Number of employees 3,969 5,962 9,932 169 10,101 179 Ageas Annual Report 2021 180 | 240 Insurance Total General Group 31 December 2020 Life Non-life Eliminations Insurance Account Eliminations Total Assets Cash and cash equivalents 959 391 1,350 891 2,241 Financial investments 56,248 7,460 63,708 5 (3) 63,710 Investment property 2,673 216 2,889 2,889 Loans 11,928 1,188 (38) 13,078 1,165 (845) 13,398 Investments related to unit-linked contracts 17,088 17,088 17,088 Equity accounted investments 4,177 838 (91) 4,924 4 1 4,929 Reinsurance and other receivables 397 1,694 (343) 1,748 310 (97) 1,961 Current tax assets 23 26 49 49 Deferred tax assets 37 61 98 98 Accrued interest and other assets 1,210 650 (1) 1,859 127 (101) 1,885 Property, plant and equipment 1,487 332 1,819 8 1,827 Goodwill and other intangible assets 900 578 (261) 1,217 12 1,229 Assets held for sale 5 109 114 114 Total assets 97,132 13,543 (734) 109,941 2,522 (1,045) 111,418 Liabilities Liabilities arising from Life insurance contracts 29,987 29,987 (14) 29,973 Liabilities arising from Life investment contracts 31,629 31,629 31,629 Liabilities related to unit-linked contracts 17,090 17,090 17,090 Liabilities arising from Non-life insurance contracts 7,404 7,404 7,404 Subordinated liabilities 1,103 410 (39) 1,474 2,128 (844) 2,758 Borrowings 3,429 484 3,913 7 3,920 Current tax liabilities 75 13 1 89 89 Deferred tax liabilities 871 219 (1) 1,089 16 1,105 RPN(I) 420 420 Accrued interest and other liabilities 2,313 1,010 (342) 2,981 139 (186) 2,934 Provisions 32 43 75 247 322 Total liabilities 86,529 9,583 (381) 95,731 2,957 (1,044) 97,644 Shareholders' equity 8,720 3,616 (344) 11,992 (435) (2) 11,555 Non-controlling interests 1,883 344 (9) 2,218 1 2,219 Total equity 10,603 3,960 (353) 14,210 (435) (1) 13,774 Total liabilities and equity 97,132 13,543 (734) 109,941 2,522 (1,045) 111,418 Number of employees 3,673 6,207 9,880 165 10,045 181 | 240 8.11 Income statement split into Life and Non-life Insurance Total General Group 2021 Life Non-life Eliminations Insurance Account Eliminations Total Income - Gross premium income 4,392 4,589 8,981 (2) 8,979 - Change in unearned premiums 14 1 15 (1) 14 - Ceded earned premiums (28) (432) (460) (460) Net earned premiums 4,364 4,171 1 8,536 (3) 8,533 Interest, dividend and other investment income 2,179 263 (16) 2,426 38 (37) 2,427 Unrealised gain (loss) on RPN(I) (101) (101) Result on sales and revaluations 246 50 296 (4) 2 294 Income related to investments for unit-linked contracts 1,406 1,406 1,406 Share in result of equity accounted investments 413 51 (1) 463 1 464 Fee and commission income 339 127 1 467 467 Other income 203 94 (1) 296 8 (22) 282 Total income 9,150 4,756 (16) 13,890 (58) (60) 13,772 Expenses - Insurance claims and benefits, gross (4,914) (2,847) 1 (7,760) 3 (7,757) - Insurance claims and benefits, ceded 17 269 286 286 Insurance claims and benefits, net (4,897) (2,578) 1 (7,474) 3 (7,471) Charges related to unit-linked contracts (1,572) (1,572) (1,572) Financing costs (82) (26) 2 (106) (68) 36 (138) Change in impairments (41) (41) (41) Change in provisions 2 1 (1) 2 13 15 Fee and commission expenses (410) (803) (1,213) (1,213) Staff expenses (417) (404) (821) (35) 4 (852) Other expenses (700) (541) 13 (1,228) (60) 19 (1,269) Total expenses (8,117) (4,351) 15 (12,453) (150) 62 (12,541) Result before taxation 1,033 405 (1) 1,437 (208) 2 1,231 Tax income (expenses) (145) (51) (196) (19) (215) Net result for the period 888 354 (1) 1,241 (227) 2 1,016 Attributable to non-controlling interests 145 26 171 171 Net result attributable to shareholders 743 328 (1) 1,070 (227) 2 845 Total income from external customers 9,124 4,754 (10) 13,868 (96) 13,772 Total income internal 26 2 (6) 22 38 (60) Total income 9,150 4,756 (16) 13,890 (58) (60) 13,772 Gross inflow (sum of gross written premiums and premium inflow of investment contracts without Discretionary Participation Features) can be presented as follows. Insurance Total General Group 2021 Life Non-life Eliminations Insurance Account Eliminations Total Gross premium income 4,392 4,589 8,981 (2) 8,979 Inflow deposit accounting 1,826 1,826 1,826 Gross inflow 6,218 4,589 10,807 (2) 10,805 GENERAL NOTES 180 Ageas Annual Report 2021 180 | 240 Insurance Total General Group 31 December 2020 Life Non-life Eliminations Insurance Account Eliminations Total Assets Cash and cash equivalents 959 391 1,350 891 2,241 Financial investments 56,248 7,460 63,708 5 (3) 63,710 Investment property 2,673 216 2,889 2,889 Loans 11,928 1,188 (38) 13,078 1,165 (845) 13,398 Investments related to unit-linked contracts 17,088 17,088 17,088 Equity accounted investments 4,177 838 (91) 4,924 4 1 4,929 Reinsurance and other receivables 397 1,694 (343) 1,748 310 (97) 1,961 Current tax assets 23 26 49 49 Deferred tax assets 37 61 98 98 Accrued interest and other assets 1,210 650 (1) 1,859 127 (101) 1,885 Property, plant and equipment 1,487 332 1,819 8 1,827 Goodwill and other intangible assets 900 578 (261) 1,217 12 1,229 Assets held for sale 5 109 114 114 Total assets 97,132 13,543 (734) 109,941 2,522 (1,045) 111,418 Liabilities Liabilities arising from Life insurance contracts 29,987 29,987 (14) 29,973 Liabilities arising from Life investment contracts 31,629 31,629 31,629 Liabilities related to unit-linked contracts 17,090 17,090 17,090 Liabilities arising from Non-life insurance contracts 7,404 7,404 7,404 Subordinated liabilities 1,103 410 (39) 1,474 2,128 (844) 2,758 Borrowings 3,429 484 3,913 7 3,920 Current tax liabilities 75 13 1 89 89 Deferred tax liabilities 871 219 (1) 1,089 16 1,105 RPN(I) 420 420 Accrued interest and other liabilities 2,313 1,010 (342) 2,981 139 (186) 2,934 Provisions 32 43 75 247 322 Total liabilities 86,529 9,583 (381) 95,731 2,957 (1,044) 97,644 Shareholders' equity 8,720 3,616 (344) 11,992 (435) (2) 11,555 Non-controlling interests 1,883 344 (9) 2,218 1 2,219 Total equity 10,603 3,960 (353) 14,210 (435) (1) 13,774 Total liabilities and equity 97,132 13,543 (734) 109,941 2,522 (1,045) 111,418 Number of employees 3,673 6,207 9,880 165 10,045 181 | 240 8.11 Income statement split into Life and Non-life Insurance Total General Group 2021 Life Non-life Eliminations Insurance Account Eliminations Total Income - Gross premium income 4,392 4,589 8,981 (2) 8,979 - Change in unearned premiums 14 1 15 (1) 14 - Ceded earned premiums (28) (432) (460) (460) Net earned premiums 4,364 4,171 1 8,536 (3) 8,533 Interest, dividend and other investment income 2,179 263 (16) 2,426 38 (37) 2,427 Unrealised gain (loss) on RPN(I) (101) (101) Result on sales and revaluations 246 50 296 (4) 2 294 Income related to investments for unit-linked contracts 1,406 1,406 1,406 Share in result of equity accounted investments 413 51 (1) 463 1 464 Fee and commission income 339 127 1 467 467 Other income 203 94 (1) 296 8 (22) 282 Total income 9,150 4,756 (16) 13,890 (58) (60) 13,772 Expenses - Insurance claims and benefits, gross (4,914) (2,847) 1 (7,760) 3 (7,757) - Insurance claims and benefits, ceded 17 269 286 286 Insurance claims and benefits, net (4,897) (2,578) 1 (7,474) 3 (7,471) Charges related to unit-linked contracts (1,572) (1,572) (1,572) Financing costs (82) (26) 2 (106) (68) 36 (138) Change in impairments (41) (41) (41) Change in provisions 2 1 (1) 2 13 15 Fee and commission expenses (410) (803) (1,213) (1,213) Staff expenses (417) (404) (821) (35) 4 (852) Other expenses (700) (541) 13 (1,228) (60) 19 (1,269) Total expenses (8,117) (4,351) 15 (12,453) (150) 62 (12,541) Result before taxation 1,033 405 (1) 1,437 (208) 2 1,231 Tax income (expenses) (145) (51) (196) (19) (215) Net result for the period 888 354 (1) 1,241 (227) 2 1,016 Attributable to non-controlling interests 145 26 171 171 Net result attributable to shareholders 743 328 (1) 1,070 (227) 2 845 Total income from external customers 9,124 4,754 (10) 13,868 (96) 13,772 Total income internal 26 2 (6) 22 38 (60) Total income 9,150 4,756 (16) 13,890 (58) (60) 13,772 Gross inflow (sum of gross written premiums and premium inflow of investment contracts without Discretionary Participation Features) can be presented as follows. Insurance Total General Group 2021 Life Non-life Eliminations Insurance Account Eliminations Total Gross premium income 4,392 4,589 8,981 (2) 8,979 Inflow deposit accounting 1,826 1,826 1,826 Gross inflow 6,218 4,589 10,807 (2) 10,805 181 Ageas Annual Report 2021 182 | 240 Insurance Total General Group 2020 Life Non-life Eliminations Insurance Account Eliminations Total Income - Gross premium income 4,140 4,298 8,438 (3) 8,435 - Change in unearned premiums (23) 1 (22) (22) - Ceded earned premiums (29) (382) (411) (411) Net earned premiums 4,111 3,893 1 8,005 (3) 8,002 Interest, dividend and other investment income 2,152 257 (18) 2,391 39 (38) 2,392 Unrealised gain (loss) on RPN(I) (61) (61) Result on sales and revaluations 280 13 293 340 6 639 Income related to investments for unit-linked contracts 484 484 484 Share in result of equity accounted investments 262 64 326 2 328 Fee and commission income 274 117 (6) 385 385 Other income 130 83 (1) 212 7 (18) 201 Total income 7,693 4,427 (24) 12,096 327 (53) 12,370 Expenses - Insurance claims and benefits, gross (4,645) (2,332) 9 (6,968) 2 (6,966) - Insurance claims and benefits, ceded 22 138 (9) 151 151 Insurance claims and benefits, net (4,623) (2,194) (6,817) 2 (6,815) Charges related to unit-linked contracts (610) (610) (610) Financing costs (86) (29) 1 (114) (63) 38 (139) Change in impairments (163) (9) (172) (172) Change in provisions (5) (3) (8) 44 36 Fee and commission expenses (368) (776) 6 (1,138) (1,138) Staff expenses (406) (400) 1 (805) (32) 3 (834) Other expenses (616) (498) 16 (1,098) (82) 15 (1,165) Total expenses (6,877) (3,909) 24 (10,762) (133) 58 (10,837) Result before taxation 816 518 1,334 194 5 1,533 Tax income (expenses) (127) (87) (214) (19) (233) Net result for the period 689 431 1,120 175 5 1,300 Attributable to non-controlling interests 119 40 159 159 Net result attributable to shareholders 570 391 961 175 5 1,141 Total income from external customers 7,660 4,420 3 12,083 287 12,370 Total income internal 33 7 (27) 13 40 (53) Total income 7,693 4,427 (24) 12,096 327 (53) 12,370 Gross inflow (sum of gross written premiums and premium inflow of investment contracts without Discretionary Participation Features) can be presented as follows. Insurance Total General Group 2020 Life Non-life Eliminations Insurance Account Eliminations Total Gross premium income 4,140 4,298 8,438 (3) 8,435 Inflow deposit accounting 1,057 1,057 1,057 Gross inflow 5,197 4,298 9,495 (3) 9,492 183 | 240 8.12 Operating result insurance To analyse the insurance results, Ageas uses the concept of operating result. Operating result includes net earned premiums, fees and allocated investment income and realised capital gains or losses minus net claims and benefits and all operating expenses, including claim handling expenses, investment expenses, commissions and other expenses, allocated to insurance and/or investment contracts. The difference between operating result and result before taxation consists of all income and costs not allocated to insurance and/or investment contracts and thus not reported in the operating result or result from non- consolidated partnerships. The definitions of the alternative performance measures are explained below the tables. Within its insurance operating segments, Ageas manages its Life and Non-life businesses separately. Life business includes insurance contracts covering risks related to the life and death of individuals. Life business also includes investment contracts with and without discretionary participation features (DPF). Non-life comprises four lines of business: Accident & Health, Motor, Fire and Other damage to property (covering the risk of property losses or claims liabilities), and Other. The operating margin for the different segments and lines of business and the reconciliation to profit before taxation are shown below. Insurance Total General Group 2021 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Gross inflow Life 4,366 1,853 44 (45) 6,218 6,218 Gross inflow Non-life 2,309 1,406 822 1,579 (1,527) 4,589 (2) 4,587 Operating costs (623) (224) (213) (3) 2 (1,061) (1,061) - Guaranteed products 448 89 1 1 539 539 - Unit linked products 49 21 70 70 Life operating result 497 110 1 1 609 609 - Accident & Health 41 1 37 6 (1) 84 84 - Motor 157 77 10 37 (17) 264 264 - Fire and other damage to property (142) (4) 23 22 (10) (111) (111) - Other 69 (6) 7 21 6 97 2 99 Non-life operating result 125 68 77 86 (22) 334 2 336 Operating result 622 68 187 87 (21) 943 2 945 Share in result of equity accounted investments non allocated 11 427 (1) 437 1 438 Other result, including brokerage 52 (6) 13 (24) 22 57 (209) (152) Result before taxation 674 62 211 403 87 1,437 (208) 2 1,231 Key performance indicators Life Net underwriting margin 0.01% 0.40% 13.29% 0.10% 0.10% Investment margin 0.82% 0.35% 0.72% 0.72% Operating margin 0.83% 0.75% 13.29% 0.82% 0.82% - Operating margin Guaranteed products 0.97% 1.08% 13.29% 0.99% 0.99% - Operating margin Unit linked products 0.37% 0.32% 0.35% 0.35% Life cost ratio in % of Life technical liabilities (annualised) 0.41% 0.49% 6.40% 0.43% 0.43% Key performance indicators Non-life Expense ratio 33.2% 36.4% 25.2% 38.4% 34.8% 34.8% Claims ratio 65.0% 59.4% 58.9% 57.2% 60.6% 60.6% Combined ratio 98.2% 95.8% 84.1% 95.6% 95.4% 95.4% Operating margin 8.3% 8.7% 17.1% 6.0% 8.0% 8.1% Technical Insurance liabilities 67,349 2,605 16,036 1,656 (1,551) 86,095 (15) 86,080 GENERAL NOTES 182 Ageas Annual Report 2021 182 | 240 Insurance Total General Group 2020 Life Non-life Eliminations Insurance Account Eliminations Total Income - Gross premium income 4,140 4,298 8,438 (3) 8,435 - Change in unearned premiums (23) 1 (22) (22) - Ceded earned premiums (29) (382) (411) (411) Net earned premiums 4,111 3,893 1 8,005 (3) 8,002 Interest, dividend and other investment income 2,152 257 (18) 2,391 39 (38) 2,392 Unrealised gain (loss) on RPN(I) (61) (61) Result on sales and revaluations 280 13 293 340 6 639 Income related to investments for unit-linked contracts 484 484 484 Share in result of equity accounted investments 262 64 326 2 328 Fee and commission income 274 117 (6) 385 385 Other income 130 83 (1) 212 7 (18) 201 Total income 7,693 4,427 (24) 12,096 327 (53) 12,370 Expenses - Insurance claims and benefits, gross (4,645) (2,332) 9 (6,968) 2 (6,966) - Insurance claims and benefits, ceded 22 138 (9) 151 151 Insurance claims and benefits, net (4,623) (2,194) (6,817) 2 (6,815) Charges related to unit-linked contracts (610) (610) (610) Financing costs (86) (29) 1 (114) (63) 38 (139) Change in impairments (163) (9) (172) (172) Change in provisions (5) (3) (8) 44 36 Fee and commission expenses (368) (776) 6 (1,138) (1,138) Staff expenses (406) (400) 1 (805) (32) 3 (834) Other expenses (616) (498) 16 (1,098) (82) 15 (1,165) Total expenses (6,877) (3,909) 24 (10,762) (133) 58 (10,837) Result before taxation 816 518 1,334 194 5 1,533 Tax income (expenses) (127) (87) (214) (19) (233) Net result for the period 689 431 1,120 175 5 1,300 Attributable to non-controlling interests 119 40 159 159 Net result attributable to shareholders 570 391 961 175 5 1,141 Total income from external customers 7,660 4,420 3 12,083 287 12,370 Total income internal 33 7 (27) 13 40 (53) Total income 7,693 4,427 (24) 12,096 327 (53) 12,370 Gross inflow (sum of gross written premiums and premium inflow of investment contracts without Discretionary Participation Features) can be presented as follows. Insurance Total General Group 2020 Life Non-life Eliminations Insurance Account Eliminations Total Gross premium income 4,140 4,298 8,438 (3) 8,435 Inflow deposit accounting 1,057 1,057 1,057 Gross inflow 5,197 4,298 9,495 (3) 9,492 183 | 240 8.12 Operating result insurance To analyse the insurance results, Ageas uses the concept of operating result. Operating result includes net earned premiums, fees and allocated investment income and realised capital gains or losses minus net claims and benefits and all operating expenses, including claim handling expenses, investment expenses, commissions and other expenses, allocated to insurance and/or investment contracts. The difference between operating result and result before taxation consists of all income and costs not allocated to insurance and/or investment contracts and thus not reported in the operating result or result from non- consolidated partnerships. The definitions of the alternative performance measures are explained below the tables. Within its insurance operating segments, Ageas manages its Life and Non-life businesses separately. Life business includes insurance contracts covering risks related to the life and death of individuals. Life business also includes investment contracts with and without discretionary participation features (DPF). Non-life comprises four lines of business: Accident & Health, Motor, Fire and Other damage to property (covering the risk of property losses or claims liabilities), and Other. The operating margin for the different segments and lines of business and the reconciliation to profit before taxation are shown below. Insurance Total General Group 2021 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Gross inflow Life 4,366 1,853 44 (45) 6,218 6,218 Gross inflow Non-life 2,309 1,406 822 1,579 (1,527) 4,589 (2) 4,587 Operating costs (623) (224) (213) (3) 2 (1,061) (1,061) - Guaranteed products 448 89 1 1 539 539 - Unit linked products 49 21 70 70 Life operating result 497 110 1 1 609 609 - Accident & Health 41 1 37 6 (1) 84 84 - Motor 157 77 10 37 (17) 264 264 - Fire and other damage to property (142) (4) 23 22 (10) (111) (111) - Other 69 (6) 7 21 6 97 2 99 Non-life operating result 125 68 77 86 (22) 334 2 336 Operating result 622 68 187 87 (21) 943 2 945 Share in result of equity accounted investments non allocated 11 427 (1) 437 1 438 Other result, including brokerage 52 (6) 13 (24) 22 57 (209) (152) Result before taxation 674 62 211 403 87 1,437 (208) 2 1,231 Key performance indicators Life Net underwriting margin 0.01% 0.40% 13.29% 0.10% 0.10% Investment margin 0.82% 0.35% 0.72% 0.72% Operating margin 0.83% 0.75% 13.29% 0.82% 0.82% - Operating margin Guaranteed products 0.97% 1.08% 13.29% 0.99% 0.99% - Operating margin Unit linked products 0.37% 0.32% 0.35% 0.35% Life cost ratio in % of Life technical liabilities (annualised) 0.41% 0.49% 6.40% 0.43% 0.43% Key performance indicators Non-life Expense ratio 33.2% 36.4% 25.2% 38.4% 34.8% 34.8% Claims ratio 65.0% 59.4% 58.9% 57.2% 60.6% 60.6% Combined ratio 98.2% 95.8% 84.1% 95.6% 95.4% 95.4% Operating margin 8.3% 8.7% 17.1% 6.0% 8.0% 8.1% Technical Insurance liabilities 67,349 2,605 16,036 1,656 (1,551) 86,095 (15) 86,080 183 Ageas Annual Report 2021 184 | 240 Insurance Total General Group 2020 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Gross inflow Life 3,991 1,208 15 (17) 5,197 5,197 Gross inflow Non-life 2,109 1,382 775 1,626 (1,594) 4,298 (3) 4,295 Operating costs (607) (212) (203) (3) (1,025) (1,025) - Guaranteed products 373 137 1 511 511 - Unit linked products 38 11 49 49 Life operating result 411 148 1 560 560 - Accident & Health 33 1 46 4 (2) 82 82 - Motor 94 68 24 40 2 228 228 - Fire and other damage to property 53 (5) 18 30 96 96 - Other 45 (9) 7 3 46 (3) 43 Non-life operating result 225 55 95 77 452 (3) 449 Operating result 636 55 243 78 1,012 (3) 1,009 Share in result of equity accounted investments non allocated 14 16 293 1 324 1 325 Other result, including brokerage 39 1 (18) (24) 1 (1) (2) 193 8 199 Result before taxation 675 70 241 269 79 1,334 194 5 1,533 Key performance indicators Life Net underwriting margin (0.03%) 0.62% 37.28% 0.12% 0.12% Investment margin 0.73% 0.36% 0.64% 0.64% Operating margin 0.70% 0.98% 37.28% 0.76% 0.76% - Operating margin Guaranteed products 0.77% 1.59% 37.28% 0.90% 0.90% - Operating margin Unit linked products 0.38% 0.17% 0.29% 0.29% Life cost ratio in % of Life technical liabilities (annualised) 0.41% 0.45% 1.14% 0.42% 0.42% Key performance indicators Non-life Expense ratio 36.1% 47.1% 28.4% 33.6% 36.1% 36.1% Claims ratio 51.7% 48.3% 49.0% 62.7% 55.2% 55.2% Combined ratio 87.8% 95.4% 77.4% 96.3% 91.3% 91.3% Operating margin 16.4% 8.9% 25.2% 5.1% 11.6% 11.5% Technical Insurance liabilities 66,965 2,427 16,665 1,395 (1,342) 86,110 (14) 86,096 185 | 240 Definitions of alternative performance measures in the tables: Net underwriting result : The difference between the net earned premiums and the sum of the actual claim payments and the change in insurance liabilities, both net of reinsurance. The result is presented net of allocated claim handling expenses, general expenses, commissions and reinsurance. Net underwriting margin : For Life the net annualised underwriting result divided by the average net Life insurance liabilities during the reporting period. For Non-life the net underwriting result divided by the net earned premium. Net investment result : The sum of investment income and realised capital gains or losses on assets covering insurance liabilities, after deduction of related investment expenses. The investment results in Life is also adjusted for the amount that is allocated to the policyholders as technical interest and profit sharing. The investment results in Accident & Life (part of Non-life) is also corrected for the technical interest that has been accrued to the insurance liabilities. Net investment margin : For Life the annualised investment result divided by the average net Life insurance liabilities during the reporting period. For Non-life the investment result divided by the net earned premium. Net operating result : The sum of net underwriting result, investment result and other result allocated to the insurance and/or investment contracts. The difference between operating result and result before taxation consists of all income and costs not allocated to the insurance and/or investment contracts and thus not reported in the operating result or result from non-consolidated partnerships. Net operating margin : For Life the annualised operating result of the period divided by the average net Life insurance liabilities. For Non-life the operating result divided by the net earned premium. Net earned premium : The written premiums of Non-life covering the risks for the current period netted for the premiums paid to reinsurers and the change in unearned premiums reserves. Expense ratio : The expenses as a percentage of net earned premiums. Included in expenses are internal costs of claims handling commissions, net of reinsurance. Claims ratio : The cost of claims, net of reinsurance, as a percentage of net earned premiums. Combined ratio : A measure of profitability in Non-life which is the ratio between the insurer’s total expenses and net earned premiums. This is insurer’s total expenses as a percentage of net earned premiums. This is the sum of the claims ratio and the expense ratio. GENERAL NOTES 184 Ageas Annual Report 2021 184 | 240 Insurance Total General Group 2020 Belgium UK CEU Asia Reinsurance Eliminations Insurance Account Eliminations Total Gross inflow Life 3,991 1,208 15 (17) 5,197 5,197 Gross inflow Non-life 2,109 1,382 775 1,626 (1,594) 4,298 (3) 4,295 Operating costs (607) (212) (203) (3) (1,025) (1,025) - Guaranteed products 373 137 1 511 511 - Unit linked products 38 11 49 49 Life operating result 411 148 1 560 560 - Accident & Health 33 1 46 4 (2) 82 82 - Motor 94 68 24 40 2 228 228 - Fire and other damage to property 53 (5) 18 30 96 96 - Other 45 (9) 7 3 46 (3) 43 Non-life operating result 225 55 95 77 452 (3) 449 Operating result 636 55 243 78 1,012 (3) 1,009 Share in result of equity accounted investments non allocated 14 16 293 1 324 1 325 Other result, including brokerage 39 1 (18) (24) 1 (1) (2) 193 8 199 Result before taxation 675 70 241 269 79 1,334 194 5 1,533 Key performance indicators Life Net underwriting margin (0.03%) 0.62% 37.28% 0.12% 0.12% Investment margin 0.73% 0.36% 0.64% 0.64% Operating margin 0.70% 0.98% 37.28% 0.76% 0.76% - Operating margin Guaranteed products 0.77% 1.59% 37.28% 0.90% 0.90% - Operating margin Unit linked products 0.38% 0.17% 0.29% 0.29% Life cost ratio in % of Life technical liabilities (annualised) 0.41% 0.45% 1.14% 0.42% 0.42% Key performance indicators Non-life Expense ratio 36.1% 47.1% 28.4% 33.6% 36.1% 36.1% Claims ratio 51.7% 48.3% 49.0% 62.7% 55.2% 55.2% Combined ratio 87.8% 95.4% 77.4% 96.3% 91.3% 91.3% Operating margin 16.4% 8.9% 25.2% 5.1% 11.6% 11.5% Technical Insurance liabilities 66,965 2,427 16,665 1,395 (1,342) 86,110 (14) 86,096 185 | 240 Definitions of alternative performance measures in the tables: Net underwriting result : The difference between the net earned premiums and the sum of the actual claim payments and the change in insurance liabilities, both net of reinsurance. The result is presented net of allocated claim handling expenses, general expenses, commissions and reinsurance. Net underwriting margin : For Life the net annualised underwriting result divided by the average net Life insurance liabilities during the reporting period. For Non-life the net underwriting result divided by the net earned premium. Net investment result : The sum of investment income and realised capital gains or losses on assets covering insurance liabilities, after deduction of related investment expenses. The investment results in Life is also adjusted for the amount that is allocated to the policyholders as technical interest and profit sharing. The investment results in Accident & Life (part of Non-life) is also corrected for the technical interest that has been accrued to the insurance liabilities. Net investment margin : For Life the annualised investment result divided by the average net Life insurance liabilities during the reporting period. For Non-life the investment result divided by the net earned premium. Net operating result : The sum of net underwriting result, investment result and other result allocated to the insurance and/or investment contracts. The difference between operating result and result before taxation consists of all income and costs not allocated to the insurance and/or investment contracts and thus not reported in the operating result or result from non-consolidated partnerships. Net operating margin : For Life the annualised operating result of the period divided by the average net Life insurance liabilities. For Non-life the operating result divided by the net earned premium. Net earned premium : The written premiums of Non-life covering the risks for the current period netted for the premiums paid to reinsurers and the change in unearned premiums reserves. Expense ratio : The expenses as a percentage of net earned premiums. Included in expenses are internal costs of claims handling commissions, net of reinsurance. Claims ratio : The cost of claims, net of reinsurance, as a percentage of net earned premiums. Combined ratio : A measure of profitability in Non-life which is the ratio between the insurer’s total expenses and net earned premiums. This is insurer’s total expenses as a percentage of net earned premiums. This is the sum of the claims ratio and the expense ratio. 185 Ageas Annual Report 2021 187 | 240 Cash includes cash on hand, current accounts and other financial instruments with a term of less than three months from the date on which they were acquired. 31 December 2021 31 December 2020 Cash on hand 2 2 Due from banks 1,750 2,053 Other 185 186 Total cash and cash equivalents 1,937 2,241 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 9 Cash and Cash Equivalents NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 186 Ageas Annual Report 2021 D Notes to the Consolidated statement of ﬁnancial position 187 | 240 Cash includes cash on hand, current accounts and other financial instruments with a term of less than three months from the date on which they were acquired. 31 December 2021 31 December 2020 Cash on hand 2 2 Due from banks 1,750 2,053 Other 185 186 Total cash and cash equivalents 1,937 2,241 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 9 Cash and Cash Equivalents 187 Ageas Annual Report 2021 Cash and Cash Equivalents 188 | 240 The composition of financial investments is as follows. 31 December 2021 31 December 2020 Financial investments - Held to maturity 4,351 4,416 - Available for sale 55,582 59,317 - Held at fair value through profit or loss 340 297 - Derivatives held for trading 6 16 Total, gross 60,279 64,046 Impairments: - of investments available for sale (327) (336) Total impairments (327) (336) Total 59,952 63,710 10.1 Investments held to maturity Government bonds Total Investments held to maturity at 1 January 2020 4,438 4,438 Maturities (18) (18) Amortisation (4) (4) Investments held to maturity at 31 December 2020 4,416 4,416 Maturities (58) (58) Amortisation (7) (7) Investments held to maturity at 31 December 2021 4,351 4,351 Fair value at 31 December 2020 7,101 7,101 Fair value at 31 December 2021 6,497 6,497 The fair value of government bonds classified as investments held to maturity is based on quoted prices in active markets (level 1). Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 10 Financial investments 189 | 240 In the following table the government bonds classified as held to maturity as at 31 December are detailed by country of origin. 31 December 2021 Historical/amortised cost Fair value Belgian national government 4,304 6,399 Portuguese national government 47 98 Total 4,351 6,497 31 December 2020 Belgian national government 4,313 6,937 Portuguese national government 103 164 Total 4,416 7,101 10.2 Investments available for sale Historical/ Gross Gross amortised unrealised unrealised Total Fair 31 December 2021 cost gains losses gross Impairments value Government bonds 25,944 5,241 (45) 31,140 31,140 Corporate debt securities 17,329 1,109 (23) 18,415 (20) 18,395 Structured credit instruments 50 2 52 (1) 51 Available for sale investments in debt securities 43,323 6,352 (68) 49,607 (21) 49,586 Private equities and venture capital 173 20 (1) 192 192 Equity securities 4,551 1,258 (28) 5,781 (306) 5,475 Other investments 2 2 2 Available for sale investments in equity securities and other investments 4,726 1,278 (29) 5,975 (306) 5,669 Total investments available for sale 48,049 7,630 (97) 55,582 (327) 55,255 Historical/ Gross Gross amortised unrealised unrealised Total Fair 31 December 2020 cost gains losses gross Impairments value Government bonds 26,910 7,392 34,302 34,302 Corporate debt securities 18,083 1,699 (7) 19,775 (22) 19,753 Structured credit instruments 49 2 51 51 Available for sale investments in debt securities 45,042 9,093 (7) 54,128 (22) 54,106 Private equities and venture capital 99 19 118 118 Equity securities 4,281 816 (29) 5,068 (314) 4,754 Other investments 3 3 3 Available for sale investments in equity securities and other investments 4,383 835 (29) 5,189 (314) 4,875 Total investments available for sale 49,425 9,928 (36) 59,317 (336) 58,981 An amount of EUR 2,032 million of the investments available for sale has been pledged as collateral (2020: EUR 2,288 million). NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 188 Ageas Annual Report 2021 Financial investments 188 | 240 The composition of financial investments is as follows. 31 December 2021 31 December 2020 Financial investments - Held to maturity 4,351 4,416 - Available for sale 55,582 59,317 - Held at fair value through profit or loss 340 297 - Derivatives held for trading 6 16 Total, gross 60,279 64,046 Impairments: - of investments available for sale (327) (336) Total impairments (327) (336) Total 59,952 63,710 10.1 Investments held to maturity Government bonds Total Investments held to maturity at 1 January 2020 4,438 4,438 Maturities (18) (18) Amortisation (4) (4) Investments held to maturity at 31 December 2020 4,416 4,416 Maturities (58) (58) Amortisation (7) (7) Investments held to maturity at 31 December 2021 4,351 4,351 Fair value at 31 December 2020 7,101 7,101 Fair value at 31 December 2021 6,497 6,497 The fair value of government bonds classified as investments held to maturity is based on quoted prices in active markets (level 1). Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 10 Financial investments 189 | 240 In the following table the government bonds classified as held to maturity as at 31 December are detailed by country of origin. 31 December 2021 Historical/amortised cost Fair value Belgian national government 4,304 6,399 Portuguese national government 47 98 Total 4,351 6,497 31 December 2020 Belgian national government 4,313 6,937 Portuguese national government 103 164 Total 4,416 7,101 10.2 Investments available for sale Historical/ Gross Gross amortised unrealised unrealised Total Fair 31 December 2021 cost gains losses gross Impairments value Government bonds 25,944 5,241 (45) 31,140 31,140 Corporate debt securities 17,329 1,109 (23) 18,415 (20) 18,395 Structured credit instruments 50 2 52 (1) 51 Available for sale investments in debt securities 43,323 6,352 (68) 49,607 (21) 49,586 Private equities and venture capital 173 20 (1) 192 192 Equity securities 4,551 1,258 (28) 5,781 (306) 5,475 Other investments 2 2 2 Available for sale investments in equity securities and other investments 4,726 1,278 (29) 5,975 (306) 5,669 Total investments available for sale 48,049 7,630 (97) 55,582 (327) 55,255 Historical/ Gross Gross amortised unrealised unrealised Total Fair 31 December 2020 cost gains losses gross Impairments value Government bonds 26,910 7,392 34,302 34,302 Corporate debt securities 18,083 1,699 (7) 19,775 (22) 19,753 Structured credit instruments 49 2 51 51 Available for sale investments in debt securities 45,042 9,093 (7) 54,128 (22) 54,106 Private equities and venture capital 99 19 118 118 Equity securities 4,281 816 (29) 5,068 (314) 4,754 Other investments 3 3 3 Available for sale investments in equity securities and other investments 4,383 835 (29) 5,189 (314) 4,875 Total investments available for sale 49,425 9,928 (36) 59,317 (336) 58,981 An amount of EUR 2,032 million of the investments available for sale has been pledged as collateral (2020: EUR 2,288 million). 189 Ageas Annual Report 2021 190 | 240 The valuation of investments available for sale is based on:  Level 1: quoted prices in active markets;  Level 2: observable market data in active markets;  Level 3: non-observable inputs (counterparty quotes). 31 December 2021 Level 1 Level 2 Level 3 Total Government bonds 30,589 551 31,140 Corporate debt securities 16,002 1,953 440 18,395 Structured credit instruments 51 51 Equity securities, private equities and other investments 3,186 1,547 936 5,669 Total Investments available for sale 49,777 4,102 1,376 55,255 31 December 2020 Level 1 Level 2 Level 3 Total Government bonds 33,900 402 34,302 Corporate debt securities 18,178 1,103 472 19,753 Structured credit instruments 8 42 1 51 Equity securities, private equities and other investments 2,554 1,482 839 4,875 Total Investments available for sale 54,640 3,029 1,312 58,981 The changes in level 3 valuation are as follows. 2021 2020 Balance as at 1 January 1,312 1,282 Maturity/redemption or repayment (63) (28) Acquired 182 126 Proceeds from sales (140) (30) Realised gains (losses) 21 Impairments (3) Unrealised gains (losses) 67 (36) Foreign exchange differences and other adjustments (2) Balance as at 31 December 1,376 1,312 Level 3 valuations for private equities and venture capital use fair values disclosed in the audited financial statements of the relevant participations. Level 3 valuations for equities and asset-backed securities use a discounted cash flow methodology. Expected cash flows take into account original underwriting criteria, borrower attributes (such as age and credit scores), loan-to-value ratios, expected house price movements and expected prepayment rates etc. Expected cash flows are discounted at risk-adjusted rates. Market participants often use such discounted cash flow techniques to price private equities and venture capital. We rely also on these quotes to a certain extent when valuing these instruments. These techniques are subject to inherent limitations, such as estimation of the appropriate risk-adjusted discount rate, and different assumptions and inputs would yield different results. The level 3 positions are mainly sensitive to a change in the level of expected future cash flows and, accordingly, their fair values vary in proportion to changes of these cash flows. The changes in value of the level 3 instruments are accounted for in other comprehensive income. Quantitative unobservable inputs used when measuring fair value are not developed by the entity. 191 | 240 Government bonds detailed by country of origin Historical/ Gross Amortised Unrealised Fair 31 December 2021 Cost gains (losses) value Belgian national government 10,891 2,203 13,094 French national government 4,689 1,106 5,795 Portuguese national government 2,124 357 2,481 Austrian national government 1,722 402 2,124 Spanish national government 2,107 287 2,394 Italian national government 1,159 342 1,501 German national government 830 235 1,065 Dutch national government 463 58 521 Irish national government 332 33 365 British national government 222 13 235 Polish national government 274 35 309 Slovakian national government 200 44 244 Czech Republic national government Finnish national government 91 14 105 US national government 2 2 Other national governments 838 67 905 Total 25,944 5,196 31,140 Historical/ Gross Amortised Unrealised Fair 31 December 2020 Cost gains (losses) value Belgian national government 11,336 3,289 14,625 French national government 4,745 1,515 6,260 Austrian national government 2,311 467 2,778 Portuguese national government 2,040 556 2,596 Spanish national government 2,021 427 2,448 Italian national government 1,171 437 1,608 German national government 859 290 1,149 Dutch national government 497 94 591 Irish national government 336 54 390 British national government 190 26 216 Polish national government 283 52 335 Slovakian national government 159 58 217 Czech Republic national government 32 32 Finnish national government 91 19 110 US national government 2 2 Other national governments 837 108 945 Total 26,910 7,392 34,302 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 190 Ageas Annual Report 2021 190 | 240 The valuation of investments available for sale is based on:  Level 1: quoted prices in active markets;  Level 2: observable market data in active markets;  Level 3: non-observable inputs (counterparty quotes). 31 December 2021 Level 1 Level 2 Level 3 Total Government bonds 30,589 551 31,140 Corporate debt securities 16,002 1,953 440 18,395 Structured credit instruments 51 51 Equity securities, private equities and other investments 3,186 1,547 936 5,669 Total Investments available for sale 49,777 4,102 1,376 55,255 31 December 2020 Level 1 Level 2 Level 3 Total Government bonds 33,900 402 34,302 Corporate debt securities 18,178 1,103 472 19,753 Structured credit instruments 8 42 1 51 Equity securities, private equities and other investments 2,554 1,482 839 4,875 Total Investments available for sale 54,640 3,029 1,312 58,981 The changes in level 3 valuation are as follows. 2021 2020 Balance as at 1 January 1,312 1,282 Maturity/redemption or repayment (63) (28) Acquired 182 126 Proceeds from sales (140) (30) Realised gains (losses) 21 Impairments (3) Unrealised gains (losses) 67 (36) Foreign exchange differences and other adjustments (2) Balance as at 31 December 1,376 1,312 Level 3 valuations for private equities and venture capital use fair values disclosed in the audited financial statements of the relevant participations. Level 3 valuations for equities and asset-backed securities use a discounted cash flow methodology. Expected cash flows take into account original underwriting criteria, borrower attributes (such as age and credit scores), loan-to-value ratios, expected house price movements and expected prepayment rates etc. Expected cash flows are discounted at risk-adjusted rates. Market participants often use such discounted cash flow techniques to price private equities and venture capital. We rely also on these quotes to a certain extent when valuing these instruments. These techniques are subject to inherent limitations, such as estimation of the appropriate risk-adjusted discount rate, and different assumptions and inputs would yield different results. The level 3 positions are mainly sensitive to a change in the level of expected future cash flows and, accordingly, their fair values vary in proportion to changes of these cash flows. The changes in value of the level 3 instruments are accounted for in other comprehensive income. Quantitative unobservable inputs used when measuring fair value are not developed by the entity. 191 | 240 Government bonds detailed by country of origin Historical/ Gross Amortised Unrealised Fair 31 December 2021 Cost gains (losses) value Belgian national government 10,891 2,203 13,094 French national government 4,689 1,106 5,795 Portuguese national government 2,124 357 2,481 Austrian national government 1,722 402 2,124 Spanish national government 2,107 287 2,394 Italian national government 1,159 342 1,501 German national government 830 235 1,065 Dutch national government 463 58 521 Irish national government 332 33 365 British national government 222 13 235 Polish national government 274 35 309 Slovakian national government 200 44 244 Czech Republic national government Finnish national government 91 14 105 US national government 2 2 Other national governments 838 67 905 Total 25,944 5,196 31,140 Historical/ Gross Amortised Unrealised Fair 31 December 2020 Cost gains (losses) value Belgian national government 11,336 3,289 14,625 French national government 4,745 1,515 6,260 Austrian national government 2,311 467 2,778 Portuguese national government 2,040 556 2,596 Spanish national government 2,021 427 2,448 Italian national government 1,171 437 1,608 German national government 859 290 1,149 Dutch national government 497 94 591 Irish national government 336 54 390 British national government 190 26 216 Polish national government 283 52 335 Slovakian national government 159 58 217 Czech Republic national government 32 32 Finnish national government 91 19 110 US national government 2 2 Other national governments 837 108 945 Total 26,910 7,392 34,302 191 Ageas Annual Report 2021 192 | 240 The table below shows net unrealised gains and losses on investments available for sale included in equity. Equity securities and other investments also include private equities and venture capital. 31 December 2021 31 December 2020 Available for sale investments in debt securities: Carrying amount 49,586 54,106 Gross unrealised gains and losses 6,284 9,086 - Related tax (1,586) (2,300) Shadow accounting (2,251) (4,511) - Related tax 652 1,228 Net unrealised gains and losses 3,099 3,503 31 December 2021 31 December 2020 Available for sale investments in equity securities and other investments: Carrying amount 5,669 4,875 Gross unrealised gains and losses 1,249 806 - Related tax (134) (113) Shadow accounting (756) (531) - Related tax 118 74 Net unrealised gains and losses 477 236 The changes in impairments of investments available for sale are as follows. 31 December 2021 31 December 2020 Balance as at 1 January (336) (269) Acquisitions/divestments of subsidiaries 38 Increase in impairments (34) (154) Reversal on sale/disposal 42 49 Foreign exchange differences and other adjustments 1 Balance as at 31 December (327) (336) 10.3 Investments held at fair value through profit or loss 31 December 2021 31 December 2020 Government bonds Corporate debt securities 134 132 Structured credit instruments 3 4 Debt securities 137 136 Equity securities 36 12 Other investments 167 149 Equity securities and other investments 203 161 Total investments held at fair value through profit or loss 340 297 Investments held at fair value through profit or loss include primarily investments related to insurance liabilities where cash flows are linked to the performance of these assets, either contractually or on the basis of discretionary participation and whose measurement incorporates current information. This measurement significantly reduces an accounting mismatch that would otherwise arise from measuring assets and liabilities and the related gains and losses on different bases. Other investments held at fair value through profit or loss relate to investments in the property fund. The nominal value of the debt securities held at fair value through profit or loss as at 31 December 2021 is EUR 133 million (31 December 2020: EUR 134 million). 193 | 240 The valuation of investments held at fair value through profit or loss is based on:  Level 1 : quoted prices in active markets;  Level 2 : observable market data in active markets;  Level 3 : non-observable inputs (counterparty quotes). The valuation at year-end is as follows. 31 December 2021 Level 1 Level 2 Level 3 Total Government Bonds Corporate debt securities 134 134 Structured credit instruments 3 3 Equity securities 36 36 Other investments 61 69 37 167 Total Investments held at fair value through profit or loss 61 206 73 340 31 December 2020 Level 1 Level 2 Level 3 Total Government Bonds Corporate debt securities 130 2 132 Structured credit instruments 4 4 Equity securities 12 12 Other investments 149 149 Total Investments held at fair value through profit or loss 149 134 14 297 10.4 Derivatives held for trading Derivatives held for trading are based on level 2 valuation (observable market data in active markets). See also note 27 Derivatives for further details. 10.5 Securities lending Under securities lending agreements, we have authorised third parties to use certain of our securities for a limited period of time, after which they return the securities to us. During such time, we continue to earn the revenues that these securities generate. We also benefit from collateral under the form of other securities with a coverage rate of at least 105%. As at year-end, such agreements covered an amount of EUR 738 million (EUR 1,006 million last year). 10.6 Interests in unconsolidated structured entities AG Insurance, a subsidiary of Ageas Group, holds notes which represents an interest (through the receipt of principal and interest) in structured entities that it does not consolidate. The structured entities invest in mortgage receivables and lease receivables and generate funds through the issuance of notes or units. These structured notes and units are recorded in ’Investments available for sale’. Next to the notes and units, AG Insurance does not hold any other interest in these structured entities. The maximum loss exposure AG Insurance has is limited to the carrying amount of the notes or units held. The carrying amount of interest held by AG Insurance in the Fund of mortgage loans amounts to EUR 410 million at 31 December 2021 (EUR 447 million at 31 December 2020). The carrying amount of interest held by AG Insurance in Lease-backed receivables amounts to EUR 35 million at 31 December 2021 (EUR 22 million at 31 December 2020). The carrying amount of interest held by AG Insurance in Private Equity amounts to EUR 27 million at 31 December 2021 (EUR 0 million at 31 December 2020). The Fund of mortgage loans is fully detained by AG Insurance, and the total assets of the Lease-backed receivables amounts to EUR 339 million at 31 December 2021 (EUR 348 million at 31 December 2020) NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 192 Ageas Annual Report 2021 192 | 240 The table below shows net unrealised gains and losses on investments available for sale included in equity. Equity securities and other investments also include private equities and venture capital. 31 December 2021 31 December 2020 Available for sale investments in debt securities: Carrying amount 49,586 54,106 Gross unrealised gains and losses 6,284 9,086 - Related tax (1,586) (2,300) Shadow accounting (2,251) (4,511) - Related tax 652 1,228 Net unrealised gains and losses 3,099 3,503 31 December 2021 31 December 2020 Available for sale investments in equity securities and other investments: Carrying amount 5,669 4,875 Gross unrealised gains and losses 1,249 806 - Related tax (134) (113) Shadow accounting (756) (531) - Related tax 118 74 Net unrealised gains and losses 477 236 The changes in impairments of investments available for sale are as follows. 31 December 2021 31 December 2020 Balance as at 1 January (336) (269) Acquisitions/divestments of subsidiaries 38 Increase in impairments (34) (154) Reversal on sale/disposal 42 49 Foreign exchange differences and other adjustments 1 Balance as at 31 December (327) (336) 10.3 Investments held at fair value through profit or loss 31 December 2021 31 December 2020 Government bonds Corporate debt securities 134 132 Structured credit instruments 3 4 Debt securities 137 136 Equity securities 36 12 Other investments 167 149 Equity securities and other investments 203 161 Total investments held at fair value through profit or loss 340 297 Investments held at fair value through profit or loss include primarily investments related to insurance liabilities where cash flows are linked to the performance of these assets, either contractually or on the basis of discretionary participation and whose measurement incorporates current information. This measurement significantly reduces an accounting mismatch that would otherwise arise from measuring assets and liabilities and the related gains and losses on different bases. Other investments held at fair value through profit or loss relate to investments in the property fund. The nominal value of the debt securities held at fair value through profit or loss as at 31 December 2021 is EUR 133 million (31 December 2020: EUR 134 million). 193 | 240 The valuation of investments held at fair value through profit or loss is based on:  Level 1 : quoted prices in active markets;  Level 2 : observable market data in active markets;  Level 3 : non-observable inputs (counterparty quotes). The valuation at year-end is as follows. 31 December 2021 Level 1 Level 2 Level 3 Total Government Bonds Corporate debt securities 134 134 Structured credit instruments 3 3 Equity securities 36 36 Other investments 61 69 37 167 Total Investments held at fair value through profit or loss 61 206 73 340 31 December 2020 Level 1 Level 2 Level 3 Total Government Bonds Corporate debt securities 130 2 132 Structured credit instruments 4 4 Equity securities 12 12 Other investments 149 149 Total Investments held at fair value through profit or loss 149 134 14 297 10.4 Derivatives held for trading Derivatives held for trading are based on level 2 valuation (observable market data in active markets). See also note 27 Derivatives for further details. 10.5 Securities lending Under securities lending agreements, we have authorised third parties to use certain of our securities for a limited period of time, after which they return the securities to us. During such time, we continue to earn the revenues that these securities generate. We also benefit from collateral under the form of other securities with a coverage rate of at least 105%. As at year-end, such agreements covered an amount of EUR 738 million (EUR 1,006 million last year). 10.6 Interests in unconsolidated structured entities AG Insurance, a subsidiary of Ageas Group, holds notes which represents an interest (through the receipt of principal and interest) in structured entities that it does not consolidate. The structured entities invest in mortgage receivables and lease receivables and generate funds through the issuance of notes or units. These structured notes and units are recorded in ’Investments available for sale’. Next to the notes and units, AG Insurance does not hold any other interest in these structured entities. The maximum loss exposure AG Insurance has is limited to the carrying amount of the notes or units held. The carrying amount of interest held by AG Insurance in the Fund of mortgage loans amounts to EUR 410 million at 31 December 2021 (EUR 447 million at 31 December 2020). The carrying amount of interest held by AG Insurance in Lease-backed receivables amounts to EUR 35 million at 31 December 2021 (EUR 22 million at 31 December 2020). The carrying amount of interest held by AG Insurance in Private Equity amounts to EUR 27 million at 31 December 2021 (EUR 0 million at 31 December 2020). The Fund of mortgage loans is fully detained by AG Insurance, and the total assets of the Lease-backed receivables amounts to EUR 339 million at 31 December 2021 (EUR 348 million at 31 December 2020) 193 Ageas Annual Report 2021 194 | 240 Investment property mainly comprises office buildings and retail space. 31 December 2021 31 December 2020 Investment property 3,120 2,891 Impairments of investment property (3) (2) Total investment property 3,117 2,889 2021 2020 Acquisition cost as at 1 January 3,661 3,338 Change in accounting policy Acquisitions/divestments of subsidiaries 35 33 Additions/purchases 303 496 Capital improvements 74 61 Disposals (100) (235) Transfer from (to) property, plant and equipment (1) Foreign exchange differences Other (43) (31) Acquisition cost as at 31 December 3,930 3,661 Accumulated depreciation as at 1 January (770) (730) Acquisitions/divestments of subsidiaries Depreciation expense (97) (94) Reversal of depreciation due to disposals 32 46 Transfer from (to) property, plant and equipment 1 Other 25 7 Accumulated depreciation as at 31 December (810) (770) Accumulated impairments as at 1 January (2) (5) Acquisitions/disposals of subsidiaries Increase in impairments (1) Reversal of impairments Reversal of impairments due to disposals 4 Accumulated impairments as at 31 December (3) (2) Net investment property as at 31 December 3,117 2,889 As at 31 December 2021 and 31 December 2020, no property was pledged as collateral (see also note 21 Borrowings). Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 11 Investment property 195 | 240 Annual appraisals, whereby the independent appraisers are rotated every three years, cover almost all of the investment properties. Fair values (level 3) are based on non-observable market data and/or discounted cash flows. Expected property cash flows take into account expected rental income growth rates, void periods, occupancy rates, lease incentive costs, such as rent-free periods, and other costs not paid by tenants. Expected net cash flows are then discounted using risk- adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms. For development property (i.e. under construction), the fair value is set to cost until the property is operational. 31 December 2021 31 December 2020 Fair values supported by market evidence 483 302 Fair value subject to an independent valuation 3,823 3,797 Total fair value of investment property 4,306 4,099 Total carrying amount (including lease liability) 3,057 2,829 Gross unrealised gains (losses) 1,249 1,270 Unrealised gains (losses) to policyholders (40) (36) Taxation (342) (344) Net unrealised gains (losses) (not recognised in equity) 867 890 Property rented out under operating lease Ageas rents out certain assets – mainly property held for investment purposes – to external parties based on operating lease agreements. As at 31 December the minimum payments to be received from irrevocable lease agreements amounted to: 2021 2020 Less than 3 months 51 52 3 months to 1 year 145 147 1 year to 2 years 167 162 2 years to 3 years 134 140 3 years to 4 years 110 111 4 years to 5 years 101 94 More than 5 years 630 677 Total undiscounted lease payments receivable 1,338 1,383 An amount of EUR 66 million in 2021 of the total minimum payments to be received from irrevocable lease agreements relates to property, plant and equipment (2020: EUR 80 million). The remainder relates to investment property. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 194 Ageas Annual Report 2021 Investment property 194 | 240 Investment property mainly comprises office buildings and retail space. 31 December 2021 31 December 2020 Investment property 3,120 2,891 Impairments of investment property (3) (2) Total investment property 3,117 2,889 2021 2020 Acquisition cost as at 1 January 3,661 3,338 Change in accounting policy Acquisitions/divestments of subsidiaries 35 33 Additions/purchases 303 496 Capital improvements 74 61 Disposals (100) (235) Transfer from (to) property, plant and equipment (1) Foreign exchange differences Other (43) (31) Acquisition cost as at 31 December 3,930 3,661 Accumulated depreciation as at 1 January (770) (730) Acquisitions/divestments of subsidiaries Depreciation expense (97) (94) Reversal of depreciation due to disposals 32 46 Transfer from (to) property, plant and equipment 1 Other 25 7 Accumulated depreciation as at 31 December (810) (770) Accumulated impairments as at 1 January (2) (5) Acquisitions/disposals of subsidiaries Increase in impairments (1) Reversal of impairments Reversal of impairments due to disposals 4 Accumulated impairments as at 31 December (3) (2) Net investment property as at 31 December 3,117 2,889 As at 31 December 2021 and 31 December 2020, no property was pledged as collateral (see also note 21 Borrowings). Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 11 Investment property 195 | 240 Annual appraisals, whereby the independent appraisers are rotated every three years, cover almost all of the investment properties. Fair values (level 3) are based on non-observable market data and/or discounted cash flows. Expected property cash flows take into account expected rental income growth rates, void periods, occupancy rates, lease incentive costs, such as rent-free periods, and other costs not paid by tenants. Expected net cash flows are then discounted using risk- adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms. For development property (i.e. under construction), the fair value is set to cost until the property is operational. 31 December 2021 31 December 2020 Fair values supported by market evidence 483 302 Fair value subject to an independent valuation 3,823 3,797 Total fair value of investment property 4,306 4,099 Total carrying amount (including lease liability) 3,057 2,829 Gross unrealised gains (losses) 1,249 1,270 Unrealised gains (losses) to policyholders (40) (36) Taxation (342) (344) Net unrealised gains (losses) (not recognised in equity) 867 890 Property rented out under operating lease Ageas rents out certain assets – mainly property held for investment purposes – to external parties based on operating lease agreements. As at 31 December the minimum payments to be received from irrevocable lease agreements amounted to: 2021 2020 Less than 3 months 51 52 3 months to 1 year 145 147 1 year to 2 years 167 162 2 years to 3 years 134 140 3 years to 4 years 110 111 4 years to 5 years 101 94 More than 5 years 630 677 Total undiscounted lease payments receivable 1,338 1,383 An amount of EUR 66 million in 2021 of the total minimum payments to be received from irrevocable lease agreements relates to property, plant and equipment (2020: EUR 80 million). The remainder relates to investment property. 195 Ageas Annual Report 2021 196 | 240 31 December 2021 31 December 2020 Government and official institutions 5,120 5,110 Commercial loans 6,984 5,970 Residential mortgages 1,175 1,179 Policyholder loans 527 462 Interest bearing deposits 390 340 Loans to banks 325 366 Total 14,521 13,427 Less impairments (29) (29) Total Loans 14,492 13,398 12.1 Commercial loans 31 December 2021 31 December 2020 Real Estate 459 367 Infrastructure 1,624 1,280 Corporate 4,705 4,098 Finance Lease Receivables 163 165 Other 33 60 Total commercial loans 6,984 5,970 Ageas has granted credit lines for a total amount of EUR 1,024 million (31 December 2020: EUR 982 million). 12.2 Lease Maturity Finance lease receivables 31 December 2021 31 December 2020 Less than 1 year 3 3 1 year to 3 years 7 5 3 years to 5 years 25 5 More than 5 years 128 152 Total Finance Lease Receivables 163 165 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 12 Loans 197 | 240 12.3 Collateral on loans The following table provides details of collateral and guarantees received as security for loans. Total credit exposure loans 2021 2020 Carrying amount 14,492 13,398 Collateral received Financial instruments 386 373 Property, plant and equipment 1,999 2,076 Other collateral and guarantees 104 98 Unsecured exposure 12,003 10,851 Collateral amounts in excess of credit exposure (1) 919 1,001 (1) Collateral amounts in excess of credit exposure relate to loans for which the collateral is higher than the underlying individual loan. 12.4 Impairments on loans Specific 2021 Specific 2020 credit risk IBNR credit risk IBNR Balance as at 1 January 26 4 27 1 Increase in impairments 2 2 3 Release of impairments (2) (2) Write-offs of uncollectible loans (1) (1) Balance as at 31 December 25 4 26 4 The following table provides details of collateral and guarantees received as security for impaired loans. Total impaired credit exposure on loans 2021 2020 Impaired outstanding 43 48 Collateral received Property, plant and equipment 30 44 Collateral and guarantees in excess of impaired credit exposure (1) 8 17 (1) Collateral amounts in excess of credit exposure relate to loans for which the collateral is higher than the underlying individual loan. Interests in unconsolidated structured entities AG Insurance, together with Ageas France, Ageas Portugal and Ageas Reinsurance hold notes which represents interests (through the receipt of principal and interest) in structured entities that Ageas group does not consolidate. The structured entities invest in mortgage receivables and generates funds through the issuance of notes. Next to the notes, AG Insurance, Ageas France, Ageas Reinsurance and Ageas Portugal do not hold any other interest in these structured entities. The maximum loss exposure AG Insurance, Ageas France, Ageas Reinsurance and Ageas Portugal have is limited to the carrying amount of the notes held (EUR 2,355 million at 31 December 2021 and EUR 2,298 million at 31 December 2020). NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 196 Ageas Annual Report 2021 Loans 196 | 240 31 December 2021 31 December 2020 Government and official institutions 5,120 5,110 Commercial loans 6,984 5,970 Residential mortgages 1,175 1,179 Policyholder loans 527 462 Interest bearing deposits 390 340 Loans to banks 325 366 Total 14,521 13,427 Less impairments (29) (29) Total Loans 14,492 13,398 12.1 Commercial loans 31 December 2021 31 December 2020 Real Estate 459 367 Infrastructure 1,624 1,280 Corporate 4,705 4,098 Finance Lease Receivables 163 165 Other 33 60 Total commercial loans 6,984 5,970 Ageas has granted credit lines for a total amount of EUR 1,024 million (31 December 2020: EUR 982 million). 12.2 Lease Maturity Finance lease receivables 31 December 2021 31 December 2020 Less than 1 year 3 3 1 year to 3 years 7 5 3 years to 5 years 25 5 More than 5 years 128 152 Total Finance Lease Receivables 163 165 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 12 Loans 197 | 240 12.3 Collateral on loans The following table provides details of collateral and guarantees received as security for loans. Total credit exposure loans 2021 2020 Carrying amount 14,492 13,398 Collateral received Financial instruments 386 373 Property, plant and equipment 1,999 2,076 Other collateral and guarantees 104 98 Unsecured exposure 12,003 10,851 Collateral amounts in excess of credit exposure (1) 919 1,001 (1) Collateral amounts in excess of credit exposure relate to loans for which the collateral is higher than the underlying individual loan. 12.4 Impairments on loans Specific 2021 Specific 2020 credit risk IBNR credit risk IBNR Balance as at 1 January 26 4 27 1 Increase in impairments 2 2 3 Release of impairments (2) (2) Write-offs of uncollectible loans (1) (1) Balance as at 31 December 25 4 26 4 The following table provides details of collateral and guarantees received as security for impaired loans. Total impaired credit exposure on loans 2021 2020 Impaired outstanding 43 48 Collateral received Property, plant and equipment 30 44 Collateral and guarantees in excess of impaired credit exposure (1) 8 17 (1) Collateral amounts in excess of credit exposure relate to loans for which the collateral is higher than the underlying individual loan. Interests in unconsolidated structured entities AG Insurance, together with Ageas France, Ageas Portugal and Ageas Reinsurance hold notes which represents interests (through the receipt of principal and interest) in structured entities that Ageas group does not consolidate. The structured entities invest in mortgage receivables and generates funds through the issuance of notes. Next to the notes, AG Insurance, Ageas France, Ageas Reinsurance and Ageas Portugal do not hold any other interest in these structured entities. The maximum loss exposure AG Insurance, Ageas France, Ageas Reinsurance and Ageas Portugal have is limited to the carrying amount of the notes held (EUR 2,355 million at 31 December 2021 and EUR 2,298 million at 31 December 2020). 197 Ageas Annual Report 2021 198 | 240 The following table provides an overview of the most significant associates and joint ventures. The percentage of interest may vary in case there are several associates and joint ventures in one country with different shareholdings’ percentages held by the group. 2021 2020 % Carrying Carrying interest amount amount Associates and joint ventures Taiping Holdings China 12.00% - 24.90% 2,529 2,078 Muang Thai Group Holding Thailand 7.83% - 30.87% 1,072 1,271 Maybank Ageas Holding Berhad Malaysia 30.95% 510 462 Taiping Reinsurance Company Limited China 24.99% 328 327 CCN Belgium 50.00% 52 6 AgeSA Turkey 40.00% 98 Aksigorta Turkey 36.00% 44 67 DTHP Belgium 33.00% 63 64 East West Ageas Life Philippines 50.00% 54 54 Pleyel Belgium 56.50% 25 29 Ageas Federal Life Insurance Company India 49.00% 90 88 Royal Sundaram General Insurance Company Limited India 40.00% 207 181 EPB NV (Eurocommercial properties) Belgium 25.60% 51 51 MB Ageas Life JSC Vietnam 32.09% 21 17 Royal Park Investments Belgium 44.71% 1 4 Other 183 236 Total 5,328 4,929 The carrying amount in CCN increased following an additional acquisition of 45% stake in 2021 (see note 3 Acquisitions and disposals for more details). AgeSA (formerly AvivaSA) was acquired by Ageas Group in May 2021 (see note 3 Acquisitions and disposals for more details). Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 13 Equity accounted investments 199 | 240 The details of the equity accounted investments are as follows. Share in equity of Share Total Total associates Total Total Net in result of assets liabilities Equity and income expenses result associates and (100% (100% (100% joint ventures (100% (100% (100% joint ventures Dividend 2021 interest) interest) interest) (Ageas share) interest) interest) interest) (Ageas share) received Taiping Holdings 118,344 108,055 10,289 2,525 24,424 (23,277) 1,147 283 160 Muang Thai Group Holding 17,973 14,444 3,529 1,039 2,666 (2,398) 268 80 9 Maybank Ageas Holding Berhad 9,873 8,292 1,581 489 1,829 (1,659) 170 53 16 Taiping Reinsurance Co. Limited 7,183 6,068 1,115 279 1,908 (1,900) 8 2 CCN 121 17 104 52 2 (3) (1) (1) AgeSA 614 413 201 80 185 (158) 27 11 DTHP 860 670 190 63 58 (80) (22) (7) East West Ageas Life 251 143 108 54 75 (84) (9) (5) Pleyel 249 83 166 25 3 (11) (8) (5) Aksigorta 438 368 70 26 318 (288) 30 11 14 Ageas Federal Life Insurance Co. 1,740 1,583 157 77 400 (391) 9 4 6 Royal Sundaram General Insurance Company Limited 968 777 191 77 321 (300) 21 9 EPB NV (Eurocommercial properties) 542 342 200 51 31 (29) 2 1 MB Ageas Life JSC 278 212 66 21 224 (215) 9 3 Royal Park Investments 7 7 1 1 1 Related Goodwill 286 Other 183 24 13 Total 5,328 464 219 Share in equity of Share Total Total associates Total Total Net in result of assets liabilities Equity and income expenses result associates and (100% (100% (100% joint ventures (100% (100% (100% joint ventures Dividend 2020 interest) interest) interest) (Ageas share) interest) interest) interest) (Ageas share) received Taiping Holdings 91,751 83,288 8,463 2,075 21,435 (20,577) 858 213 113 Muang Thai Group Holding 17,876 13,708 4,168 1,237 2,625 (2,549) 76 23 9 Maybank Ageas Holding Berhad 8,642 7,213 1,429 442 2,301 (2,157) 144 45 17 Taiping Reinsurance Co. Limited 5,972 4,784 1,188 297 236 (231) 5 1 BG1 10 (8) 2 1 Tesco Insurance Ltd 221 (193) 28 14 8 DTHP 801 606 195 64 60 (80) (20) (6) East West Ageas Life 196 88 108 54 50 (62) (12) (6) Pleyel 250 76 174 29 3 (10) (7) (4) Aksigorta 621 519 102 37 375 (329) 46 16 11 Ageas Federal Life Insurance Co. 1,427 1,313 114 56 396 (383) 13 3 1 Royal Sundaram General Insurance Company Limited 819 673 146 59 313 (285) 28 11 EPB NV (Eurocommercial properties) 555 358 197 51 33 (33) MB Ageas Life JSC 153 100 53 17 141 (128) 13 4 Royal Park Investments 8 8 4 5 (2) 4 1 2 Related Goodwill 271 Other 236 12 16 Total 4,929 328 177 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 198 Ageas Annual Report 2021 Equity accounted investments 198 | 240 The following table provides an overview of the most significant associates and joint ventures. The percentage of interest may vary in case there are several associates and joint ventures in one country with different shareholdings’ percentages held by the group. 2021 2020 % Carrying Carrying interest amount amount Associates and joint ventures Taiping Holdings China 12.00% - 24.90% 2,529 2,078 Muang Thai Group Holding Thailand 7.83% - 30.87% 1,072 1,271 Maybank Ageas Holding Berhad Malaysia 30.95% 510 462 Taiping Reinsurance Company Limited China 24.99% 328 327 CCN Belgium 50.00% 52 6 AgeSA Turkey 40.00% 98 Aksigorta Turkey 36.00% 44 67 DTHP Belgium 33.00% 63 64 East West Ageas Life Philippines 50.00% 54 54 Pleyel Belgium 56.50% 25 29 Ageas Federal Life Insurance Company India 49.00% 90 88 Royal Sundaram General Insurance Company Limited India 40.00% 207 181 EPB NV (Eurocommercial properties) Belgium 25.60% 51 51 MB Ageas Life JSC Vietnam 32.09% 21 17 Royal Park Investments Belgium 44.71% 1 4 Other 183 236 Total 5,328 4,929 The carrying amount in CCN increased following an additional acquisition of 45% stake in 2021 (see note 3 Acquisitions and disposals for more details). AgeSA (formerly AvivaSA) was acquired by Ageas Group in May 2021 (see note 3 Acquisitions and disposals for more details). Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 13 Equity accounted investments 199 | 240 The details of the equity accounted investments are as follows. Share in equity of Share Total Total associates Total Total Net in result of assets liabilities Equity and income expenses result associates and (100% (100% (100% joint ventures (100% (100% (100% joint ventures Dividend 2021 interest) interest) interest) (Ageas share) interest) interest) interest) (Ageas share) received Taiping Holdings 118,344 108,055 10,289 2,525 24,424 (23,277) 1,147 283 160 Muang Thai Group Holding 17,973 14,444 3,529 1,039 2,666 (2,398) 268 80 9 Maybank Ageas Holding Berhad 9,873 8,292 1,581 489 1,829 (1,659) 170 53 16 Taiping Reinsurance Co. Limited 7,183 6,068 1,115 279 1,908 (1,900) 8 2 CCN 121 17 104 52 2 (3) (1) (1) AgeSA 614 413 201 80 185 (158) 27 11 DTHP 860 670 190 63 58 (80) (22) (7) East West Ageas Life 251 143 108 54 75 (84) (9) (5) Pleyel 249 83 166 25 3 (11) (8) (5) Aksigorta 438 368 70 26 318 (288) 30 11 14 Ageas Federal Life Insurance Co. 1,740 1,583 157 77 400 (391) 9 4 6 Royal Sundaram General Insurance Company Limited 968 777 191 77 321 (300) 21 9 EPB NV (Eurocommercial properties) 542 342 200 51 31 (29) 2 1 MB Ageas Life JSC 278 212 66 21 224 (215) 9 3 Royal Park Investments 7 7 1 1 1 Related Goodwill 286 Other 183 24 13 Total 5,328 464 219 Share in equity of Share Total Total associates Total Total Net in result of assets liabilities Equity and income expenses result associates and (100% (100% (100% joint ventures (100% (100% (100% joint ventures Dividend 2020 interest) interest) interest) (Ageas share) interest) interest) interest) (Ageas share) received Taiping Holdings 91,751 83,288 8,463 2,075 21,435 (20,577) 858 213 113 Muang Thai Group Holding 17,876 13,708 4,168 1,237 2,625 (2,549) 76 23 9 Maybank Ageas Holding Berhad 8,642 7,213 1,429 442 2,301 (2,157) 144 45 17 Taiping Reinsurance Co. Limited 5,972 4,784 1,188 297 236 (231) 5 1 BG1 10 (8) 2 1 Tesco Insurance Ltd 221 (193) 28 14 8 DTHP 801 606 195 64 60 (80) (20) (6) East West Ageas Life 196 88 108 54 50 (62) (12) (6) Pleyel 250 76 174 29 3 (10) (7) (4) Aksigorta 621 519 102 37 375 (329) 46 16 11 Ageas Federal Life Insurance Co. 1,427 1,313 114 56 396 (383) 13 3 1 Royal Sundaram General Insurance Company Limited 819 673 146 59 313 (285) 28 11 EPB NV (Eurocommercial properties) 555 358 197 51 33 (33) MB Ageas Life JSC 153 100 53 17 141 (128) 13 4 Royal Park Investments 8 8 4 5 (2) 4 1 2 Related Goodwill 271 Other 236 12 16 Total 4,929 328 177 199 Ageas Annual Report 2021 200 | 240 Equity associates and joint ventures are subject to dividend restrictions arising from minimum capital and solvency requirements imposed by regulators in the countries in which they operate. Dividend payments are sometimes subject to shareholder agreements with the partners in the company. In certain situations, consensus is required before dividend is declared. In addition, shareholder agreements (related to parties having an interest in a company in which Ageas has a non-controlling interest) may include:  specific articles on voting rights or dividend distribution;  lock-up periods during which all parties having shares are not allowed to sell shares before a certain period or without prior approval of the other parties involved;  options to sell or resell shares to the other party/parties involved in the shareholder agreement, including the underlying calculation methodology to value the shares;  earn-out mechanisms which allow the party originally selling the shares additional revenues when certain objectives are realised;  exclusivity clauses or non-compete clauses related to the sales of insurance products. Royal Park Investments After the disposal of the assets and settlement of the liabilities, the remaining activity of RPI is essentially limited to the management of litigation initiated against a number of US financial institutions. 201 | 240 31 December 2021 31 December 2020 Reinsurers' share of liabilities arising from insurance and investment contracts 801 720 Receivables from policyholders 409 353 Fees and commissions receivable 110 108 Receivables from intermediaries 379 337 Reinsurance receivables 136 31 Other 366 466 Total gross 2,201 2,015 Impairments (52) (54) Total net 2,149 1,961 The line ‘Other’ includes VAT and other indirect taxes, as well as the advance payment of EUR 109 million (31 December 2020: EUR 215 million) to the Stichting Forsettlement (see note 25 Provisions). Changes in impairments of reinsurance and other receivables 2021 2020 Balance as at 1 January 54 49 Increase in impairments 8 17 Release of impairments (5) (2) Write-offs of uncollectible amounts (4) (10) Foreign exchange differences and other adjustments (1) Balance as at 31 December 52 54 In 2020, the increases in impairments and write-offs of uncollectible amounts were linked to Covid- 19 related rental receivables that Ageas has written off for the lease of retail property and office buildings. Changes in the reinsurer’s share of liabilities arising from insurance and investment contracts 2021 2020 Balance as at 1 January 720 729 Change in liabilities current year 179 104 Change in liabilities prior years (19) (54) Claims paid current year (42) (28) Claims paid prior years (39) (72) Other net additions through income statement (17) 59 Foreign exchange differences and other adjustments 19 (18) Balance as at 31 December 801 720 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 14 Reinsurance and other receivables NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 200 Ageas Annual Report 2021 200 | 240 Equity associates and joint ventures are subject to dividend restrictions arising from minimum capital and solvency requirements imposed by regulators in the countries in which they operate. Dividend payments are sometimes subject to shareholder agreements with the partners in the company. In certain situations, consensus is required before dividend is declared. In addition, shareholder agreements (related to parties having an interest in a company in which Ageas has a non-controlling interest) may include:  specific articles on voting rights or dividend distribution;  lock-up periods during which all parties having shares are not allowed to sell shares before a certain period or without prior approval of the other parties involved;  options to sell or resell shares to the other party/parties involved in the shareholder agreement, including the underlying calculation methodology to value the shares;  earn-out mechanisms which allow the party originally selling the shares additional revenues when certain objectives are realised;  exclusivity clauses or non-compete clauses related to the sales of insurance products. Royal Park Investments After the disposal of the assets and settlement of the liabilities, the remaining activity of RPI is essentially limited to the management of litigation initiated against a number of US financial institutions. 201 | 240 31 December 2021 31 December 2020 Reinsurers' share of liabilities arising from insurance and investment contracts 801 720 Receivables from policyholders 409 353 Fees and commissions receivable 110 108 Receivables from intermediaries 379 337 Reinsurance receivables 136 31 Other 366 466 Total gross 2,201 2,015 Impairments (52) (54) Total net 2,149 1,961 The line ‘Other’ includes VAT and other indirect taxes, as well as the advance payment of EUR 109 million (31 December 2020: EUR 215 million) to the Stichting Forsettlement (see note 25 Provisions). Changes in impairments of reinsurance and other receivables 2021 2020 Balance as at 1 January 54 49 Increase in impairments 8 17 Release of impairments (5) (2) Write-offs of uncollectible amounts (4) (10) Foreign exchange differences and other adjustments (1) Balance as at 31 December 52 54 In 2020, the increases in impairments and write-offs of uncollectible amounts were linked to Covid- 19 related rental receivables that Ageas has written off for the lease of retail property and office buildings. Changes in the reinsurer’s share of liabilities arising from insurance and investment contracts 2021 2020 Balance as at 1 January 720 729 Change in liabilities current year 179 104 Change in liabilities prior years (19) (54) Claims paid current year (42) (28) Claims paid prior years (39) (72) Other net additions through income statement (17) 59 Foreign exchange differences and other adjustments 19 (18) Balance as at 31 December 801 720 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 14 Reinsurance and other receivables 201 Ageas Annual Report 2021 Reinsurance and other receivables 202 | 240 31 December 2021 31 December 2020 Deferred acquisition cost 418 408 Deferred other charges 114 96 Accrued income 1,000 1,043 Derivatives held for hedging purposes 34 3 Property intended for sale 323 228 Defined benefit assets 81 45 Other 69 63 Total gross 2,039 1,886 Impairments (1) Total net 2,039 1,885 Accrued income consists mainly of accrued interest income on government bonds (2021: EUR 657 million; 2020: EUR 676 million) and corporate bonds (2021: EUR 212 million; 2020: EUR 234 million). Deferred acquisition costs 2021 2020 Balance as at 1 January 408 425 Capitalised deferred acquisition costs 419 417 Depreciation expense (419) (423) Other purchases and sales of activities (2) Other adjustments including exchange rate differences 12 (10) Balance as at 31 December 418 408 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 15 Accrued interest and other assets 203 | 240 Property, plant and equipment include office buildings and public car parks. 31 December 2021 31 December 2020 Car parks 1,383 1,461 Land and buildings held for own use 209 217 Leasehold improvements 28 28 Equipment, motor vehicles and IT equipment 112 121 Buildings under construction Total 1,732 1,827 Land & building held Equipment, motor vehicles for own use and car parks and IT equipment Leased Leased Property Property 2021 Own Property (right of use) Own Property (right of use) Acquisition cost as at 1 January 1,938 613 346 40 Additions 24 47 21 14 Reversal of cost due to disposals (18) (17) (33) (7) Foreign exchange differences and other (45) (2) Acquisition cost as at 31 December 1,899 641 334 47 Accumulated depreciation as at 1 January (738) (124) (247) (17) Depreciation expense (40) (63) (30) (11) Reversal of depreciation due to disposals 6 15 32 4 Foreign exchange differences and other 5 1 Accumulated depreciation as at 31 December (767) (171) (245) (24) Accumulated impairments as at 1 January (10) (1) (1) Increase in impairments Reversal of impairments Reversal of impairments due to disposals Foreign exchange differences and other 1 1 Accumulated impairments as at 31 December (10) Total as at 31 December 1,122 470 89 23 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 16 Property, plant and equipment NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 202 Ageas Annual Report 2021 Accrued interest and other assets 202 | 240 31 December 2021 31 December 2020 Deferred acquisition cost 418 408 Deferred other charges 114 96 Accrued income 1,000 1,043 Derivatives held for hedging purposes 34 3 Property intended for sale 323 228 Defined benefit assets 81 45 Other 69 63 Total gross 2,039 1,886 Impairments (1) Total net 2,039 1,885 Accrued income consists mainly of accrued interest income on government bonds (2021: EUR 657 million; 2020: EUR 676 million) and corporate bonds (2021: EUR 212 million; 2020: EUR 234 million). Deferred acquisition costs 2021 2020 Balance as at 1 January 408 425 Capitalised deferred acquisition costs 419 417 Depreciation expense (419) (423) Other purchases and sales of activities (2) Other adjustments including exchange rate differences 12 (10) Balance as at 31 December 418 408 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 15 Accrued interest and other assets 203 | 240 Property, plant and equipment include office buildings and public car parks. 31 December 2021 31 December 2020 Car parks 1,383 1,461 Land and buildings held for own use 209 217 Leasehold improvements 28 28 Equipment, motor vehicles and IT equipment 112 121 Buildings under construction Total 1,732 1,827 Land & building held Equipment, motor vehicles for own use and car parks and IT equipment Leased Leased Property Property 2021 Own Property (right of use) Own Property (right of use) Acquisition cost as at 1 January 1,938 613 346 40 Additions 24 47 21 14 Reversal of cost due to disposals (18) (17) (33) (7) Foreign exchange differences and other (45) (2) Acquisition cost as at 31 December 1,899 641 334 47 Accumulated depreciation as at 1 January (738) (124) (247) (17) Depreciation expense (40) (63) (30) (11) Reversal of depreciation due to disposals 6 15 32 4 Foreign exchange differences and other 5 1 Accumulated depreciation as at 31 December (767) (171) (245) (24) Accumulated impairments as at 1 January (10) (1) (1) Increase in impairments Reversal of impairments Reversal of impairments due to disposals Foreign exchange differences and other 1 1 Accumulated impairments as at 31 December (10) Total as at 31 December 1,122 470 89 23 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 16 Property, plant and equipment 203 Ageas Annual Report 2021 Property, plant and equipment 204 | 240 Land & building held Equipment, motor vehicles for own use and car parks and IT equipment Leased Property Leased Property 2020 Own Property (right of use) Own Property (right of use) Acquisition cost as at 1 January 1,821 522 383 32 Additions 112 92 39 12 Reversal of cost due to disposals (1) (6) (13) (4) Foreign exchange differences and other 6 5 (63) Acquisition cost as at 31 December 1,938 613 346 40 Accumulated depreciation as at 1 January (694) (66) (288) (9) Depreciation expense (40) (63) (32) (10) Reversal of depreciation due to disposals 1 5 9 1 Foreign exchange differences and other (5) 64 1 Accumulated depreciation as at 31 December (738) (124) (247) (17) Accumulated impairments as at 1 January (10) (1) (1) Increase in impairments Reversal of impairments Reversal of impairments due to disposals Foreign exchange differences and other Accumulated impairments as at 31 December (10) (1) (1) Total as at 31 December 1,190 488 98 23 An amount of EUR 166 million of property, plant and equipment has been pledged as collateral (31 December 2020: EUR 173 million). Property, other than car parks, is externally appraised each year, whereby the independent appraisers are rotated every three years. Fair values are based on level 3 valuation. Ageas determines car park fair values using in-house models that also use unobservable market data (level 3). The resulting fair values are calibrated based on available market data and/or transactions. Level 3 valuation techniques are used for measuring car parks primarily using discounted cash flows. Expected car park cash flows take into account expected inflation, and economic growth in individual car park areas, among other factors. The expected net cash flows are discounted using risk-adjusted discount rates. The discount rate estimation considers the quality of the car park and its location, among other factors. Fair value of land and buildings held for own use and car parks 31 December 2021 31 December 2020 Total fair value of Land and buildings held for own use and car parks 1,837 1,811 Total carrying amount (including lease liability) 1,114 1,188 Gross unrealised gains (losses) 723 623 Taxation (176) (164) Net unrealised gains (losses) (not recognised in equity) 547 459 205 | 240 31 December 2021 31 December 2020 Goodwill 616 602 Public car park service concessions 537 450 VOBA 33 45 Software 83 64 Other intangible assets 53 68 Total 1,322 1,229 Changes in goodwill, VOBA and Public car park service concessions are shown below. Public Car Park Goodwill VOBA Service Concessions 2021 2020 2021 2020 2021 2020 Acquisition cost as at 1 January 630 644 529 529 726 684 Additions 1 68 52 Reversal of cost due to disposals (1) Foreign exchange differences and other 18 (15) 50 (9) Acquisition cost as at 31 December 648 630 529 529 844 726 Accumulated amortisation as at 1 January (485) (471) (265) (242) Amortisation expense (11) (13) (26) (24) Reversal of amortisation due to disposals 1 Foreign exchange differences and other (5) Accumulated amortisation as at 31 December (496) (484) (296) (265) Accumulated impairments as at 1 January (28) (30) (11) (11) Increase in impairments (2) Reversal of impairments Foreign exchange differences and other (2) 2 Accumulated impairments as at 31 December (32) (28) (11) (11) Total as at 31 December 616 602 33 45 537 450 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 17 Goodwill and other intangible assets NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 204 Ageas Annual Report 2021 204 | 240 Land & building held Equipment, motor vehicles for own use and car parks and IT equipment Leased Property Leased Property 2020 Own Property (right of use) Own Property (right of use) Acquisition cost as at 1 January 1,821 522 383 32 Additions 112 92 39 12 Reversal of cost due to disposals (1) (6) (13) (4) Foreign exchange differences and other 6 5 (63) Acquisition cost as at 31 December 1,938 613 346 40 Accumulated depreciation as at 1 January (694) (66) (288) (9) Depreciation expense (40) (63) (32) (10) Reversal of depreciation due to disposals 1 5 9 1 Foreign exchange differences and other (5) 64 1 Accumulated depreciation as at 31 December (738) (124) (247) (17) Accumulated impairments as at 1 January (10) (1) (1) Increase in impairments Reversal of impairments Reversal of impairments due to disposals Foreign exchange differences and other Accumulated impairments as at 31 December (10) (1) (1) Total as at 31 December 1,190 488 98 23 An amount of EUR 166 million of property, plant and equipment has been pledged as collateral (31 December 2020: EUR 173 million). Property, other than car parks, is externally appraised each year, whereby the independent appraisers are rotated every three years. Fair values are based on level 3 valuation. Ageas determines car park fair values using in-house models that also use unobservable market data (level 3). The resulting fair values are calibrated based on available market data and/or transactions. Level 3 valuation techniques are used for measuring car parks primarily using discounted cash flows. Expected car park cash flows take into account expected inflation, and economic growth in individual car park areas, among other factors. The expected net cash flows are discounted using risk-adjusted discount rates. The discount rate estimation considers the quality of the car park and its location, among other factors. Fair value of land and buildings held for own use and car parks 31 December 2021 31 December 2020 Total fair value of Land and buildings held for own use and car parks 1,837 1,811 Total carrying amount (including lease liability) 1,114 1,188 Gross unrealised gains (losses) 723 623 Taxation (176) (164) Net unrealised gains (losses) (not recognised in equity) 547 459 205 | 240 31 December 2021 31 December 2020 Goodwill 616 602 Public car park service concessions 537 450 VOBA 33 45 Software 83 64 Other intangible assets 53 68 Total 1,322 1,229 Changes in goodwill, VOBA and Public car park service concessions are shown below. Public Car Park Goodwill VOBA Service Concessions 2021 2020 2021 2020 2021 2020 Acquisition cost as at 1 January 630 644 529 529 726 684 Additions 1 68 52 Reversal of cost due to disposals (1) Foreign exchange differences and other 18 (15) 50 (9) Acquisition cost as at 31 December 648 630 529 529 844 726 Accumulated amortisation as at 1 January (485) (471) (265) (242) Amortisation expense (11) (13) (26) (24) Reversal of amortisation due to disposals 1 Foreign exchange differences and other (5) Accumulated amortisation as at 31 December (496) (484) (296) (265) Accumulated impairments as at 1 January (28) (30) (11) (11) Increase in impairments (2) Reversal of impairments Foreign exchange differences and other (2) 2 Accumulated impairments as at 31 December (32) (28) (11) (11) Total as at 31 December 616 602 33 45 537 450 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 17 Goodwill and other intangible assets 205 Ageas Annual Report 2021 Goodwill and other intangible assets 206 | 240 Impairment of goodwill Impairment testing of goodwill is performed annually at the end of the year by comparing the recoverable amount of cash-generating units (CGU) with their carrying amount. The recoverable amount is the higher of the value in use and fair value less costs to sell. The type of acquired entity, the level of operational integration and common management, determines the definition of the CGU. Based on these criteria, Ageas has designated CGUs on country level. The recoverable amount of a CGU is assessed by means of a discounted cash-flow model of the anticipated future cash flows of the CGU. The key assumptions used in the cash flow model depend on input reflecting various financial and economic variables, including the risk-free rate in a given country and a premium to reflect the inherent risk of the entity being evaluated. These variables are determined on the basis of management’s judgement. If the entity is listed on a stock market, the market price will also be considered an element in the evaluation. The breakdown of goodwill and impairments for the main cash-generating units as at 31 December 2021 is as follows. Goodwill Net Method used for amount Impairments amount Segment recoverable amount Cash-generating unit (CGU) Ageas Portugal 337 337 Continental Europe (CEU) Value in use Ageas (UK) 280 30 250 United Kingdom (UK) Value in use Other 31 2 29 Value in use Total 648 32 616 Ageas Portugal The reported goodwill for Ageas Portugal amounts to EUR 337 million (2020: EUR 337 million). In 2016, the legal structure in Portugal has been simplified and all Portuguese entities are now owned and controlled by Ageas Portugal Holding with a central Executive Committee on country-level which makes all strategic decisions. Therefore Ageas Portugal is considered as one CGU. The value in use calculation uses expected dividends, based on business plans approved by local and Ageas’s management over a period of three years. Estimates for after this period have been extrapolated using a growth rate of 2.0 percent, which represents an approach of expected inflation in Portugal. The discount rate of 8.92 percent used is based on the risk- free interest rate, equity risk premium and a beta coefficient. The impairment test showed that the recoverable amount exceeded the carrying value of the CGU including goodwill. Consequently, goodwill for Ageas Portugal was not impaired. Based on the sensitivity analysis with regard to the assumptions, goodwill for Ageas Portugal would not be impaired if the growth rate was largely negative or the discount rate increased by more than 5.6 percent. Ageas UK Goodwill for Ageas UK amounts to GBP 235 million (2020: GBP 235 million). The net goodwill after impairment amounts to GBP 210 million (2020: GBP 210 million). In the United Kingdom, all entities are owned and controlled by Ageas UK holding with its own Executive Committee which makes all strategic decisions. Therefore Ageas UK is considered as one CGU. The value in use calculation uses expected dividends based on business plans approved by local and Ageas’s management over a period of three years. Estimates for after this period have been extrapolated using a growth rate of 2.0 percent, which represents an approach of expected inflation. The discount rate of 5.9 percent used is based on the risk-free interest rate, equity risk premium and a beta coefficient. The impairment test showed that the recoverable amount exceeded the carrying value of the CGU including goodwill and goodwill was therefore not impaired. Based on the sensitivity analysis with regard to the assumptions, goodwill for the UK business would not be impaired if the long-term growth rate was negative and the discount rate increased by more than 6.0 percent. 207 | 240 Other Other includes goodwill in France and Belgium. Amortisation of VOBA The main contributor to VOBA is Millenniumbcp Ageas. The expected amortisation expenses is as follows. Estimated amortisation of VOBA 2022 10 2023 8 2024 6 2025 9 Total 33 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 206 Ageas Annual Report 2021 206 | 240 Impairment of goodwill Impairment testing of goodwill is performed annually at the end of the year by comparing the recoverable amount of cash-generating units (CGU) with their carrying amount. The recoverable amount is the higher of the value in use and fair value less costs to sell. The type of acquired entity, the level of operational integration and common management, determines the definition of the CGU. Based on these criteria, Ageas has designated CGUs on country level. The recoverable amount of a CGU is assessed by means of a discounted cash-flow model of the anticipated future cash flows of the CGU. The key assumptions used in the cash flow model depend on input reflecting various financial and economic variables, including the risk-free rate in a given country and a premium to reflect the inherent risk of the entity being evaluated. These variables are determined on the basis of management’s judgement. If the entity is listed on a stock market, the market price will also be considered an element in the evaluation. The breakdown of goodwill and impairments for the main cash-generating units as at 31 December 2021 is as follows. Goodwill Net Method used for amount Impairments amount Segment recoverable amount Cash-generating unit (CGU) Ageas Portugal 337 337 Continental Europe (CEU) Value in use Ageas (UK) 280 30 250 United Kingdom (UK) Value in use Other 31 2 29 Value in use Total 648 32 616 Ageas Portugal The reported goodwill for Ageas Portugal amounts to EUR 337 million (2020: EUR 337 million). In 2016, the legal structure in Portugal has been simplified and all Portuguese entities are now owned and controlled by Ageas Portugal Holding with a central Executive Committee on country-level which makes all strategic decisions. Therefore Ageas Portugal is considered as one CGU. The value in use calculation uses expected dividends, based on business plans approved by local and Ageas’s management over a period of three years. Estimates for after this period have been extrapolated using a growth rate of 2.0 percent, which represents an approach of expected inflation in Portugal. The discount rate of 8.92 percent used is based on the risk- free interest rate, equity risk premium and a beta coefficient. The impairment test showed that the recoverable amount exceeded the carrying value of the CGU including goodwill. Consequently, goodwill for Ageas Portugal was not impaired. Based on the sensitivity analysis with regard to the assumptions, goodwill for Ageas Portugal would not be impaired if the growth rate was largely negative or the discount rate increased by more than 5.6 percent. Ageas UK Goodwill for Ageas UK amounts to GBP 235 million (2020: GBP 235 million). The net goodwill after impairment amounts to GBP 210 million (2020: GBP 210 million). In the United Kingdom, all entities are owned and controlled by Ageas UK holding with its own Executive Committee which makes all strategic decisions. Therefore Ageas UK is considered as one CGU. The value in use calculation uses expected dividends based on business plans approved by local and Ageas’s management over a period of three years. Estimates for after this period have been extrapolated using a growth rate of 2.0 percent, which represents an approach of expected inflation. The discount rate of 5.9 percent used is based on the risk-free interest rate, equity risk premium and a beta coefficient. The impairment test showed that the recoverable amount exceeded the carrying value of the CGU including goodwill and goodwill was therefore not impaired. Based on the sensitivity analysis with regard to the assumptions, goodwill for the UK business would not be impaired if the long-term growth rate was negative and the discount rate increased by more than 6.0 percent. 207 | 240 Other Other includes goodwill in France and Belgium. Amortisation of VOBA The main contributor to VOBA is Millenniumbcp Ageas. The expected amortisation expenses is as follows. Estimated amortisation of VOBA 2022 10 2023 8 2024 6 2025 9 Total 33 207 Ageas Annual Report 2021 208 | 240 The following table shows the composition of shareholders’ equity as at 31 December 2021. Share capital Ordinary shares 1,502 Share premium reserve 2,051 Other reserves 3,640 Currency translation reserve 29 Net result attributable to shareholders 845 Unrealised gains and losses 3,847 Shareholders' equity 11,914 18.1 Shares issued and potential number of shares To the extent rules and regulations permit, and in the interest of the Company, the Board of Ageas was authorised for a period of three years (2021-2023) by the General Meeting of Shareholders of 19 May 2021 to increase the share capital by a maximum amount of EUR 150,000,000 for general purposes. Applied to a fraction value of EUR 7.86, this enables the issuance of up to 19,000,000 shares, representing approximately 10% of the total current share capital of the Company. This authorisation also enables the Company to meet its obligations entered into in the context of the issue of the financial instruments. Shares can also be issued due to the so-called alternative coupon settlement method (ACSM), included in certain hybrid financial instruments (for details see note 43 Contingent liabilities). Treasury shares Treasury shares are issued ordinary shares that have been bought back by Ageas. The shares are deducted from shareholders’ equity and reported in other reserves. The total number of treasury shares (5.3 million) consists of shares held for the FRESH (1.2 million), shares underlying repurchased FRESH securities (2.8 million) and the remaining shares resulting from the share buy-back programme (1.3 million) of which 0.1 million shares are used for the vesting of the restricted share programme. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 18 Shareholders’ equity Shareholders’ equity 209 | 240 Extinguishment of FRESH securities On 3 January 2020, Ageas announced that in total 65.50% (EUR 818,750,000) of the aggregate principal amount of the FRESH securities outstanding were tendered and accepted for purchase for a cash payment of EUR 513 million. The purchased FRESH securities were exchanged into 2,599,206 underlying shares of ageas SA/NV on 13 January 2020. On 2 April 2020, Ageas purchased an additional number of FRESH securities from an external third party, which were further exchanged into 150,000 underlying shares of ageas SA/NV. These shares remain on the Group’s statement of financial position as treasury shares and continue not to be entitled to dividends or voting rights. Details of the FRESH securities are provided in note 20 Subordinated liabilities. Share buy-back programme 2021-2022 Ageas announced on 11 August 2021 a new share buy-back programme, starting on 1 September 2021 and running up to 29 July 2022, for an amount of EUR 150 million. The Extraordinary General Meeting of Shareholders of ageas SA/NV of 19 May 2021 approved the cancellation of 3,520,446 shares. As a result, the total number of issued shares is reduced to 191,033,128. Restricted share programme Ageas created restricted share programmes for the members of the Executive and Management Committee (see also note 6 section 6.2 Employee share and share-linked incentive plans). 18.2 Outstanding shares Shares Treasury Shares in thousands issued shares outstanding Number of shares as at 1 January 2020 198,374 (7,820) 190,554 Cancelled shares (3,821) 3,821 Balance (acquired)/sold (3,592) (3,592) Number of shares as at 31 December 2020 194,553 (7,591) 186,962 Cancelled shares (3,520) 3,520 Balance (acquired)/sold (1,297) (1,297) Used for management share plans 72 72 Number of shares as at 31 December 2021 191,033 (5,296) 185,737 18.3 Shares entitled to dividend and voting rights in thousands Number of shares issued as at 31 December 2021 191,033 Shares not entitled to dividend and voting rights: Shares held by ageas SA/NV 4,051 Shares related to FRESH (see note 20) 1,219 Shares related to CASHES (see notes 23 and 43) 3,959 Shares entitled to voting rights and dividend 181,804 18.4 Currency translation reserve The currency translation reserve is a separate component of shareholders’ equity in which the exchange differences arising from translation of the results and financial positions of foreign operations that are included in the Ageas Consolidated Financial Statements are reported. Ageas does not hedge net investments in operations that do not have euro as their functional currency unless the impact of potential foreign exchange movements is considered beyond Ageas’s Risk Appetite. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 208 Ageas Annual Report 2021 208 | 240 The following table shows the composition of shareholders’ equity as at 31 December 2021. Share capital Ordinary shares 1,502 Share premium reserve 2,051 Other reserves 3,640 Currency translation reserve 29 Net result attributable to shareholders 845 Unrealised gains and losses 3,847 Shareholders' equity 11,914 18.1 Shares issued and potential number of shares To the extent rules and regulations permit, and in the interest of the Company, the Board of Ageas was authorised for a period of three years (2021-2023) by the General Meeting of Shareholders of 19 May 2021 to increase the share capital by a maximum amount of EUR 150,000,000 for general purposes. Applied to a fraction value of EUR 7.86, this enables the issuance of up to 19,000,000 shares, representing approximately 10% of the total current share capital of the Company. This authorisation also enables the Company to meet its obligations entered into in the context of the issue of the financial instruments. Shares can also be issued due to the so-called alternative coupon settlement method (ACSM), included in certain hybrid financial instruments (for details see note 43 Contingent liabilities). Treasury shares Treasury shares are issued ordinary shares that have been bought back by Ageas. The shares are deducted from shareholders’ equity and reported in other reserves. The total number of treasury shares (5.3 million) consists of shares held for the FRESH (1.2 million), shares underlying repurchased FRESH securities (2.8 million) and the remaining shares resulting from the share buy-back programme (1.3 million) of which 0.1 million shares are used for the vesting of the restricted share programme. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 18 Shareholders’ equity 209 | 240 Extinguishment of FRESH securities On 3 January 2020, Ageas announced that in total 65.50% (EUR 818,750,000) of the aggregate principal amount of the FRESH securities outstanding were tendered and accepted for purchase for a cash payment of EUR 513 million. The purchased FRESH securities were exchanged into 2,599,206 underlying shares of ageas SA/NV on 13 January 2020. On 2 April 2020, Ageas purchased an additional number of FRESH securities from an external third party, which were further exchanged into 150,000 underlying shares of ageas SA/NV. These shares remain on the Group’s statement of financial position as treasury shares and continue not to be entitled to dividends or voting rights. Details of the FRESH securities are provided in note 20 Subordinated liabilities. Share buy-back programme 2021-2022 Ageas announced on 11 August 2021 a new share buy-back programme, starting on 1 September 2021 and running up to 29 July 2022, for an amount of EUR 150 million. The Extraordinary General Meeting of Shareholders of ageas SA/NV of 19 May 2021 approved the cancellation of 3,520,446 shares. As a result, the total number of issued shares is reduced to 191,033,128. Restricted share programme Ageas created restricted share programmes for the members of the Executive and Management Committee (see also note 6 section 6.2 Employee share and share-linked incentive plans). 18.2 Outstanding shares Shares Treasury Shares in thousands issued shares outstanding Number of shares as at 1 January 2020 198,374 (7,820) 190,554 Cancelled shares (3,821) 3,821 Balance (acquired)/sold (3,592) (3,592) Number of shares as at 31 December 2020 194,553 (7,591) 186,962 Cancelled shares (3,520) 3,520 Balance (acquired)/sold (1,297) (1,297) Used for management share plans 72 72 Number of shares as at 31 December 2021 191,033 (5,296) 185,737 18.3 Shares entitled to dividend and voting rights in thousands Number of shares issued as at 31 December 2021 191,033 Shares not entitled to dividend and voting rights: Shares held by ageas SA/NV 4,051 Shares related to FRESH (see note 20) 1,219 Shares related to CASHES (see notes 23 and 43) 3,959 Shares entitled to voting rights and dividend 181,804 18.4 Currency translation reserve The currency translation reserve is a separate component of shareholders’ equity in which the exchange differences arising from translation of the results and financial positions of foreign operations that are included in the Ageas Consolidated Financial Statements are reported. Ageas does not hedge net investments in operations that do not have euro as their functional currency unless the impact of potential foreign exchange movements is considered beyond Ageas’s Risk Appetite. 209 Ageas Annual Report 2021 210 | 240 18.5 Unrealised gains and losses included in shareholders’ equity The table below shows the unrealised gains and losses included in shareholders’ equity. Available Reclassified to Revaluation of for sale held to maturity associates and Cash flow DPF 31 December 2021 investments investments joint ventures hedges component Total Gross 7,538 (31) 1,133 5 8,645 Related tax (1,720) 8 (1,712) Shadow accounting (3,007) (3,007) Related tax 770 770 Non-controlling interests (875) 9 14 3 (849) Discretionary participation feature (DPF) 15 (15) Total 2,721 (14) 1,147 8 (15) 3,847 Available Reclassified to Revaluation of for sale held to maturity associates and Cash flow DPF 31 December 2020 investments investments joint ventures hedges component Total Gross 9,899 (33) 1,300 (22) 11,144 Related tax (2,415) 8 1 (2,406) Shadow accounting (5,042) (5,042) Related tax 1,302 1,302 Non-controlling interests (890) 10 23 2 (855) Discretionary participation feature (DPF) 19 (19) Total 2,873 (15) 1,323 (19) (19) 4,143 Changes in the fair value of derivatives that are designated and qualify as a cash-flow hedge are recognised as an unrealised gain or loss in shareholders’ equity. Any hedge ineffectiveness is immediately recognised in the income statement. Ageas enters into insurance contracts that feature not only a guaranteed part but also other benefits, of which the amounts and the timing of declaration and payment are solely at the discretion of Ageas. Depending on the contractual and statutory terms and conditions, unrealised changes in the fair value of the asset mix related to such contracts are, after the application of shadow accounting, reported in shareholders’ equity under separate discretionary participation features (DPF) and in unrealised gains and losses related to available for sale investments. 211 | 240 The table below shows changes in gross unrealised gains and losses included in shareholders’ equity. Available Reclassified to Revaluation of for sale held to maturity associates and Cash flow investments investments joint ventures hedges Total Gross unrealised gains (losses) as at 1 January 2020 8,660 (38) 1,156 (54) 9,724 Changes in unrealised gains (losses) during the year 1,539 144 5 1,688 Reversal unrealised (gains) losses because of sales (221) 20 (201) Reversal unrealised losses because of impairments (53) (53) Acquisition and divestments of equity accounted investments (26) (26) Amortisation 4 4 Foreign exchange differences and other 1 7 8 Gross unrealised gains (losses) as at 31 December 2020 9,899 (33) 1,300 (22) 11,144 Changes in unrealised gains (losses) during the year (2,175) (158) 29 (2,304) Reversal unrealised (gains) losses because of sales (182) (182) Reversal unrealised losses because of impairments (3) (3) Acquisition and divestments of equity accounted investments (9) (9) Amortisation 2 2 Foreign exchange differences and other (1) (2) (3) Gross unrealised gains (losses) as at 31 December 2021 7,538 (31) 1,133 5 8,645 18.6 Dividend capacity The companies comprising Ageas are subject to legal restrictions regarding the amount of dividend they may pay to their shareholders. Under the Belgian Company Code, 5% of a company’s annual net profit must be placed in a legal reserve fund until this fund reaches 10% of the share capital. No dividends may be paid if the value of the company’s net assets falls below, or following payment of a dividend would fall below, the sum of its paid-up capital and non-distributable reserves. Subsidiaries and associates are also subject to dividend restrictions arising from minimum capital and solvency requirements imposed by regulators in the countries in which they operate and from shareholder agreements with the partners in the company. In certain situations consensus between the shareholders is required before dividend is declared. In addition, shareholder agreements (related to parties having a non- controlling interest in Ageas subsidiaries) may include:  specific articles on voting rights or dividend distribution;  lock-up periods during which all parties having shares are not allowed to sell shares before a certain period or without the prior approval of the other parties involved;  options to sell or resell shares to the other party (parties) involved in the shareholders agreement including the underlying calculation methodology to value the shares;  earn-out mechanisms which allow the party originally selling the shares to additional revenues when certain objectives are realised;  exclusivity clauses or non-competition clauses related to the sales of insurance products. Proposed dividend for 2021 Ageas’s solvency and cash position have shown great resilience over the past year and its operations remain strong. As a result, the Ageas Board of Directors proposes in full respect of the guidance issued by the National Bank of Belgium, to distribute a gross cash dividend of EUR 2.75 per share over the financial year 2021. This corresponds to a pay- out ratio of 52% on the Group net result excluding the impact from RPN(I) and the FRESH operation. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 210 Ageas Annual Report 2021 210 | 240 18.5 Unrealised gains and losses included in shareholders’ equity The table below shows the unrealised gains and losses included in shareholders’ equity. Available Reclassified to Revaluation of for sale held to maturity associates and Cash flow DPF 31 December 2021 investments investments joint ventures hedges component Total Gross 7,538 (31) 1,133 5 8,645 Related tax (1,720) 8 (1,712) Shadow accounting (3,007) (3,007) Related tax 770 770 Non-controlling interests (875) 9 14 3 (849) Discretionary participation feature (DPF) 15 (15) Total 2,721 (14) 1,147 8 (15) 3,847 Available Reclassified to Revaluation of for sale held to maturity associates and Cash flow DPF 31 December 2020 investments investments joint ventures hedges component Total Gross 9,899 (33) 1,300 (22) 11,144 Related tax (2,415) 8 1 (2,406) Shadow accounting (5,042) (5,042) Related tax 1,302 1,302 Non-controlling interests (890) 10 23 2 (855) Discretionary participation feature (DPF) 19 (19) Total 2,873 (15) 1,323 (19) (19) 4,143 Changes in the fair value of derivatives that are designated and qualify as a cash-flow hedge are recognised as an unrealised gain or loss in shareholders’ equity. Any hedge ineffectiveness is immediately recognised in the income statement. Ageas enters into insurance contracts that feature not only a guaranteed part but also other benefits, of which the amounts and the timing of declaration and payment are solely at the discretion of Ageas. Depending on the contractual and statutory terms and conditions, unrealised changes in the fair value of the asset mix related to such contracts are, after the application of shadow accounting, reported in shareholders’ equity under separate discretionary participation features (DPF) and in unrealised gains and losses related to available for sale investments. 211 | 240 The table below shows changes in gross unrealised gains and losses included in shareholders’ equity. Available Reclassified to Revaluation of for sale held to maturity associates and Cash flow investments investments joint ventures hedges Total Gross unrealised gains (losses) as at 1 January 2020 8,660 (38) 1,156 (54) 9,724 Changes in unrealised gains (losses) during the year 1,539 144 5 1,688 Reversal unrealised (gains) losses because of sales (221) 20 (201) Reversal unrealised losses because of impairments (53) (53) Acquisition and divestments of equity accounted investments (26) (26) Amortisation 4 4 Foreign exchange differences and other 1 7 8 Gross unrealised gains (losses) as at 31 December 2020 9,899 (33) 1,300 (22) 11,144 Changes in unrealised gains (losses) during the year (2,175) (158) 29 (2,304) Reversal unrealised (gains) losses because of sales (182) (182) Reversal unrealised losses because of impairments (3) (3) Acquisition and divestments of equity accounted investments (9) (9) Amortisation 2 2 Foreign exchange differences and other (1) (2) (3) Gross unrealised gains (losses) as at 31 December 2021 7,538 (31) 1,133 5 8,645 18.6 Dividend capacity The companies comprising Ageas are subject to legal restrictions regarding the amount of dividend they may pay to their shareholders. Under the Belgian Company Code, 5% of a company’s annual net profit must be placed in a legal reserve fund until this fund reaches 10% of the share capital. No dividends may be paid if the value of the company’s net assets falls below, or following payment of a dividend would fall below, the sum of its paid-up capital and non-distributable reserves. Subsidiaries and associates are also subject to dividend restrictions arising from minimum capital and solvency requirements imposed by regulators in the countries in which they operate and from shareholder agreements with the partners in the company. In certain situations consensus between the shareholders is required before dividend is declared. In addition, shareholder agreements (related to parties having a non- controlling interest in Ageas subsidiaries) may include:  specific articles on voting rights or dividend distribution;  lock-up periods during which all parties having shares are not allowed to sell shares before a certain period or without the prior approval of the other parties involved;  options to sell or resell shares to the other party (parties) involved in the shareholders agreement including the underlying calculation methodology to value the shares;  earn-out mechanisms which allow the party originally selling the shares to additional revenues when certain objectives are realised;  exclusivity clauses or non-competition clauses related to the sales of insurance products. Proposed dividend for 2021 Ageas’s solvency and cash position have shown great resilience over the past year and its operations remain strong. As a result, the Ageas Board of Directors proposes in full respect of the guidance issued by the National Bank of Belgium, to distribute a gross cash dividend of EUR 2.75 per share over the financial year 2021. This corresponds to a pay- out ratio of 52% on the Group net result excluding the impact from RPN(I) and the FRESH operation. 211 Ageas Annual Report 2021 212 | 240 18.7 Return on equity Ageas calculates return on equity by dividing the net result for the period by the net average equity at the beginning and the end of the period. 2021 2020 Return on equity Insurance (excluding unrealised gains & losses) 13.0% 12.4% 18.8 Earnings per share The following table details the calculation of earnings per share. 2021 2020 Net result attributable to shareholders 845 1,141 Weighted average number of ordinary shares for basic earnings per share (in thousands) 186,765 187,938 Adjustments for: - restricted shares (in thousands) expected to be awarded 140 159 Weighted average number of ordinary shares for diluted earnings per share (in thousands) 186,905 188,097 Basic earnings per share (in euro per share) 4.52 6.07 Diluted earnings per share (in euro per share) 4.52 6.06 Ageas shares related to the FRESH, as they are not entitled to dividend nor do they have voting rights, were excluded from the calculation of basic earnings per share. Ageas shares issued in relation to CASHES are included in the ordinary shares although they are not entitled to dividend nor do they have voting rights. 213 | 240 19.1 Liabilities arising from Life insurance contracts 31 December 2021 31 December 2020 Liability for future policyholder benefits 26,561 26,516 Reserve for policyholder profit sharing 245 182 Shadow accounting 1,884 3,292 Before eliminations 28,690 29,990 Eliminations (17) (17) Gross 28,673 29,973 Reinsurance (13) (34) Net 28,660 29,939 Changes in the liabilities arising from Life insurance contracts (gross of reinsurance and before eliminations) are shown below. 2021 2020 Balance as at 1 January 29,990 28,773 Gross inflow 2,023 2,064 Time value 601 662 Payments due to surrenders, maturities and other (1,783) (2,084) Transfer of liabilities (80) 267 Shadow accounting adjustment (1,350) 835 Other changes, including risk coverage (711) (527) Balance as at 31 December 28,690 29,990 The shadow accounting adjustment is a reflection of the unrealised gains and losses on the investment portfolio. The line item ‘Other changes, including risk coverage’, mainly relates to insurance and actuarial risk consumption regarding guarantees included in the contracts, and therefore vary together with the volumes. The effect of changes in assumptions used to measure the liabilities related to Life insurance contracts was immaterial in both 2021 and 2020. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 19 Insurance liabilities NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 212 Ageas Annual Report 2021 212 | 240 18.7 Return on equity Ageas calculates return on equity by dividing the net result for the period by the net average equity at the beginning and the end of the period. 2021 2020 Return on equity Insurance (excluding unrealised gains & losses) 13.0% 12.4% 18.8 Earnings per share The following table details the calculation of earnings per share. 2021 2020 Net result attributable to shareholders 845 1,141 Weighted average number of ordinary shares for basic earnings per share (in thousands) 186,765 187,938 Adjustments for: - restricted shares (in thousands) expected to be awarded 140 159 Weighted average number of ordinary shares for diluted earnings per share (in thousands) 186,905 188,097 Basic earnings per share (in euro per share) 4.52 6.07 Diluted earnings per share (in euro per share) 4.52 6.06 Ageas shares related to the FRESH, as they are not entitled to dividend nor do they have voting rights, were excluded from the calculation of basic earnings per share. Ageas shares issued in relation to CASHES are included in the ordinary shares although they are not entitled to dividend nor do they have voting rights. 213 | 240 19.1 Liabilities arising from Life insurance contracts 31 December 2021 31 December 2020 Liability for future policyholder benefits 26,561 26,516 Reserve for policyholder profit sharing 245 182 Shadow accounting 1,884 3,292 Before eliminations 28,690 29,990 Eliminations (17) (17) Gross 28,673 29,973 Reinsurance (13) (34) Net 28,660 29,939 Changes in the liabilities arising from Life insurance contracts (gross of reinsurance and before eliminations) are shown below. 2021 2020 Balance as at 1 January 29,990 28,773 Gross inflow 2,023 2,064 Time value 601 662 Payments due to surrenders, maturities and other (1,783) (2,084) Transfer of liabilities (80) 267 Shadow accounting adjustment (1,350) 835 Other changes, including risk coverage (711) (527) Balance as at 31 December 28,690 29,990 The shadow accounting adjustment is a reflection of the unrealised gains and losses on the investment portfolio. The line item ‘Other changes, including risk coverage’, mainly relates to insurance and actuarial risk consumption regarding guarantees included in the contracts, and therefore vary together with the volumes. The effect of changes in assumptions used to measure the liabilities related to Life insurance contracts was immaterial in both 2021 and 2020. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 19 Insurance liabilities 213 Ageas Annual Report 2021 Insurance liabilities 214 | 240 19.2 Liabilities arising from Life investment contracts 31 December 2021 31 December 2020 Liability for future policyholder benefits 29,256 29,672 Reserve for policyholder profit sharing 286 250 Shadow accounting 1,075 1,707 Gross 30,617 31,629 2021 2020 Balance as at 1 January 31,629 32,243 Gross inflow 1,928 1,800 Time value 319 307 Payments due to surrenders, maturities and other (2,289) (2,608) Transfer of liabilities (255) (350) Shadow accounting adjustment (632) 312 Other changes, including risk coverage (83) (75) Balance as at 31 December 30,617 31,629 The shadow accounting adjustment is a reflection of the unrealised gains and losses in the investment portfolio. The transfer of liabilities mainly relates to internal movements between product portfolios. The line item ‘Other changes, including risk coverage’, mainly relates to insurance and actuarial risk consumption regarding guarantees included in the contracts, and therefore vary together with the volumes. The effect of changes in assumptions used to measure the liabilities related to Life investment contracts was immaterial in both 2021 and 2020. 215 | 240 19.3 Liabilities related to unit-linked contracts 31 December 2021 31 December 2020 Insurance contracts 3,352 2,904 Investment contracts 15,549 14,186 Total 18,901 17,090 The following table shows the changes in liabilities related to unit-linked insurance contracts. 2021 2020 Balance as at 1 January 2,904 2,741 Gross inflow 394 294 Changes in fair value / time value 280 66 Payments due to surrenders, maturities and other (204) (152) Transfer of liabilities (11) (34) Other changes, including risk coverage (11) (11) Balance as at 31 December 3,352 2,904 The following table shows the changes in liabilities related to unit-linked investment contracts. 2021 2020 Balance as at 1 January 14,186 13,697 Gross inflow 1,825 1,056 Changes in fair value / time value 1,019 323 Payments due to surrenders, maturities and other (1,809) (1,298) Transfer of liabilities 367 442 Foreign exchange differences 1 (3) Other changes, including risk coverage (40) (31) Balance as at 31 December 15,549 14,186 The transfer of liabilities mainly reflects internal movements between different product contracts. The line item ‘Other changes, including risk coverage’, mainly relates to insurance and actuarial risk consumption, for complementary guarantees included in the contracts. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 214 Ageas Annual Report 2021 214 | 240 19.2 Liabilities arising from Life investment contracts 31 December 2021 31 December 2020 Liability for future policyholder benefits 29,256 29,672 Reserve for policyholder profit sharing 286 250 Shadow accounting 1,075 1,707 Gross 30,617 31,629 2021 2020 Balance as at 1 January 31,629 32,243 Gross inflow 1,928 1,800 Time value 319 307 Payments due to surrenders, maturities and other (2,289) (2,608) Transfer of liabilities (255) (350) Shadow accounting adjustment (632) 312 Other changes, including risk coverage (83) (75) Balance as at 31 December 30,617 31,629 The shadow accounting adjustment is a reflection of the unrealised gains and losses in the investment portfolio. The transfer of liabilities mainly relates to internal movements between product portfolios. The line item ‘Other changes, including risk coverage’, mainly relates to insurance and actuarial risk consumption regarding guarantees included in the contracts, and therefore vary together with the volumes. The effect of changes in assumptions used to measure the liabilities related to Life investment contracts was immaterial in both 2021 and 2020. 215 | 240 19.3 Liabilities related to unit-linked contracts 31 December 2021 31 December 2020 Insurance contracts 3,352 2,904 Investment contracts 15,549 14,186 Total 18,901 17,090 The following table shows the changes in liabilities related to unit-linked insurance contracts. 2021 2020 Balance as at 1 January 2,904 2,741 Gross inflow 394 294 Changes in fair value / time value 280 66 Payments due to surrenders, maturities and other (204) (152) Transfer of liabilities (11) (34) Other changes, including risk coverage (11) (11) Balance as at 31 December 3,352 2,904 The following table shows the changes in liabilities related to unit-linked investment contracts. 2021 2020 Balance as at 1 January 14,186 13,697 Gross inflow 1,825 1,056 Changes in fair value / time value 1,019 323 Payments due to surrenders, maturities and other (1,809) (1,298) Transfer of liabilities 367 442 Foreign exchange differences 1 (3) Other changes, including risk coverage (40) (31) Balance as at 31 December 15,549 14,186 The transfer of liabilities mainly reflects internal movements between different product contracts. The line item ‘Other changes, including risk coverage’, mainly relates to insurance and actuarial risk consumption, for complementary guarantees included in the contracts. 215 Ageas Annual Report 2021 216 | 240 19.4 Liabilities arising from Non-life insurance contracts The following table provides an overview of the liabilities arising from Non-life insurance contracts. 31 December 2021 31 December 2020 Claims reserves 7,620 7,076 Unearned premiums 1,730 1,614 Reserve for policyholder profit sharing 38 11 Before eliminations 9,437 8,744 Eliminations (1,548) (1,340) Gross 7,889 7,404 Reinsurance (789) (686) Net 7,100 6,718 Changes in the liabilities arising from insurance contracts for Non-life insurance contracts (gross of reinsurance and before eliminations) are shown below. 2021 2020 Balance as at 1 January 8,744 8,588 Acquisitions/divestments of subsidiaries Addition to liabilities current year 3,131 2,559 Claims paid current year (1,481) (1,223) Change in liabilities current year 1,650 1,336 Addition to liabilities prior years (285) (227) Claims paid prior years (1,066) (1,188) Change in liabilities prior years (1,351) (1,415) Change in liabilities (current and prior years) 300 (79) Change in unearned premiums (14) 22 Transfer of liabilities (70) (106) Foreign exchange differences 170 (140) Other changes 307 459 Balance as at 31 December 9,437 8,744 217 | 240 19.5 Insurance Liabilities Adequacy Testing The tests carried out at 2021 year-end have confirmed that the reported insurance liabilities are adequate. Overview of insurance liabilities by operating segment The table below provides an overview of the liabilities by operating segment. Non-life Life gross liability split: gross liability split: Total Unearned Claims Total Unit- Life 31 December 2021 Non-life Premium Outstanding Life Linked Guaranteed Belgium 4,345 363 3,933 63,003 12,387 50,616 UK 2,605 708 1,897 Continental Europe 844 200 644 15,191 6,515 8,676 Reinsurance 1,643 459 1,184 13 13 Eliminations (1,548) (1,548) (16) (1) (15) Insurance total 7,889 1,730 6,110 78,191 18,901 59,290 Non-life Life gross liability split: gross liability split: Total Unearned Claims Total Unit- Life 31 December 2020 Non-life premium outstanding Life linked Guaranteed Belgium 4,086 355 3,689 62,878 10,654 52,224 UK 2,427 691 1,736 Continental Europe 843 192 651 15,821 6,436 9,385 Reinsurance 1,388 376 1,012 7 7 Eliminations (1,340) (1,341) (14) (14) Insurance total 7,404 1,614 5,747 78,692 17,090 61,602 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 216 Ageas Annual Report 2021 216 | 240 19.4 Liabilities arising from Non-life insurance contracts The following table provides an overview of the liabilities arising from Non-life insurance contracts. 31 December 2021 31 December 2020 Claims reserves 7,620 7,076 Unearned premiums 1,730 1,614 Reserve for policyholder profit sharing 38 11 Before eliminations 9,437 8,744 Eliminations (1,548) (1,340) Gross 7,889 7,404 Reinsurance (789) (686) Net 7,100 6,718 Changes in the liabilities arising from insurance contracts for Non-life insurance contracts (gross of reinsurance and before eliminations) are shown below. 2021 2020 Balance as at 1 January 8,744 8,588 Acquisitions/divestments of subsidiaries Addition to liabilities current year 3,131 2,559 Claims paid current year (1,481) (1,223) Change in liabilities current year 1,650 1,336 Addition to liabilities prior years (285) (227) Claims paid prior years (1,066) (1,188) Change in liabilities prior years (1,351) (1,415) Change in liabilities (current and prior years) 300 (79) Change in unearned premiums (14) 22 Transfer of liabilities (70) (106) Foreign exchange differences 170 (140) Other changes 307 459 Balance as at 31 December 9,437 8,744 217 | 240 19.5 Insurance Liabilities Adequacy Testing The tests carried out at 2021 year-end have confirmed that the reported insurance liabilities are adequate. Overview of insurance liabilities by operating segment The table below provides an overview of the liabilities by operating segment. Non-life Life gross liability split: gross liability split: Total Unearned Claims Total Unit- Life 31 December 2021 Non-life Premium Outstanding Life Linked Guaranteed Belgium 4,345 363 3,933 63,003 12,387 50,616 UK 2,605 708 1,897 Continental Europe 844 200 644 15,191 6,515 8,676 Reinsurance 1,643 459 1,184 13 13 Eliminations (1,548) (1,548) (16) (1) (15) Insurance total 7,889 1,730 6,110 78,191 18,901 59,290 Non-life Life gross liability split: gross liability split: Total Unearned Claims Total Unit- Life 31 December 2020 Non-life premium outstanding Life linked Guaranteed Belgium 4,086 355 3,689 62,878 10,654 52,224 UK 2,427 691 1,736 Continental Europe 843 192 651 15,821 6,436 9,385 Reinsurance 1,388 376 1,012 7 7 Eliminations (1,340) (1,341) (14) (14) Insurance total 7,404 1,614 5,747 78,692 17,090 61,602 217 Ageas Annual Report 2021 218 | 240 31 December 2021 31 December 2020 Issued by Ageasfinlux S.A. FRESH Restricted Tier 1 Notes 384 384 Issued by ageas SA/NV Perpetual Subordinated Fixed Rate Resettable Temporary Write-Down Restricted Tier 1 Notes 744 750 Subordinated Fixed to Floating Rate Tier 2 Notes 989 994 Issued by AG Insurance Subordinated Fixed to Floating Rate Tier 2 Loan 74 74 Fixed Rate Reset Dated Subordinated Tier 2 Notes 398 397 Fixed to Floating Callable Subordinated Tier 2 Notes 100 100 Issued by Millenniumbcp Ageas Fixed to Floating Rate Callable Subordinated Restricted Tier 1 Loan 59 59 Total subordinated liabilities 2,748 2,758 31 December 2021 31 December 2020 Balance as at 1 January 2,758 3,117 Proceeds from issuance 498 Redemption (507) Realised Gains (359) Foreign exchange differences and other (10) 9 Balance as at 31 December 2,748 2,758 Most of the outstanding subordinated liabilities as at 31 December 2021 are positions with a maturity of more than 5 years. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 20 Subordinated liabilities 219 | 240 20.1 FRESH Grandfathered Restricted Tier 1 Notes On 7 May 2002, Ageasfinlux SA issued undated Floating Rate Equity- linked Subordinated Hybrid capital securities (FRESH) for a total principal amount of EUR 1,250 million at a floating rate of 3 month Euribor + 135 basis points. The securities have no maturity date, but may be exchanged for Ageas shares at a price of EUR 315 per share at the discretion of the holder. The securities will automatically convert into Ageas shares if the price of the Ageas share is equal to or higher than EUR 472.50 on twenty consecutive stock exchange business days. The securities qualify as Grandfathered Tier 1 capital under Solvency II and is rated A- by Standard & Poor’s, Baa2 by Moody’s and BBB by Fitch. The securities were issued by Ageasfinlux SA, with ageas SA/NV acting as co-obligor. The principal amount of the securities will not be repaid in cash. The sole recourse of the holders of the FRESH against the co- obligor with respect to the principal amount are the currently outstanding 1.2 million Ageas shares that Ageasfinlux SA pledges in favour of such holders. Pending the exchange of the FRESH for Ageas shares, these Ageas shares do not have any dividend rights or voting rights (the reported number of outstanding Ageas shares as at 31 December 2021 already includes the 1.2 million Ageas shares issued for the purpose of such exchange). In the event that dividends are not paid on the Ageas shares, or that the dividends to be declared are below a threshold with respect to any financial year (dividend yield less than 0.5%) and in certain other exceptional circumstances, payment of coupons will be made in accordance with the so-called alternative coupon settlement method (ACSM). The ACSM implies that new Ageas shares will be issued and delivered to the holders of the FRESH. To date all coupons have been paid in cash. If the ACSM is triggered and there is insufficient available authorised capital to enable ageas SA/NV to meet the ACSM obligation, the coupon settlement will be postponed until such time as the ability to issue shares is restored. On 19 November 2019 Ageas launched, through its wholly owned subsidiary Ageasfinlux S.A., an offer to purchase in cash any and all of the outstanding FRESH securities. Ageasfinlux S.A. simultaneously launched a consent solicitation to permit the purchase of the FRESH securities. Consent of at least a majority of the aggregate principal amount of the FRESH outstanding was necessary for the proposed amendment to the conditions of the FRESH to be adopted. On 3 January 2020, Ageas announced that in total 65.50% (EUR 818,750,000) of the aggregate principal amount of the FRESH securities outstanding were tendered and accepted for purchase. Subsequently, at the beginning of Q2 2020 Ageas purchased FRESH securities representing an aggregate principal amount of EUR 47,250,000 following a reverse inquiry by a third-party holder. Please refer to note 32 for the resulting impact on profit or loss of these FRESH tenders. All the purchased FRESH securities in 2020 were exchanged into 2,749,206 underlying shares of ageas SA/NV. These shares are recognised on the Group’s balance sheet as treasury shares and are not entitled to dividends or voting rights. The total number of outstanding shares of ageas SA/NV as an effect from the operation remains unchanged. 20.2 Subordinated Fixed to Floating Rate Tier 2 Notes On 24 November 2020 ageas SA/NV issued debt securities in the form of EUR 500 million Subordinated Fixed to Floating Rate Tier 2 Notes maturing in 2051. The Notes have a fixed coupon rate of 1.875 % payable annually until the first reset date (24 November 2031). As of the first reset date, the coupon becomes payable quarterly at a 3-month Euribor floating rate increased with an initial credit spread and a 100 basis points step-up. Note that Ageas at its option may choose to call the instrument as of 24 May 2031, which is 6 months prior to the first reset date. The instrument qualifies as Tier 2 capital for both Ageas Group and ageas SA/NV under Solvency II and is rated A- by both Standard & Poor’s and Fitch. The instrument is listed on the regulated market of the Luxembourg Stock Exchange. 20.3 Perpetual Subordinated Fixed Rate Resettable Temporary Write-Down Restricted Tier 1 Notes On 10 December 2019 ageas SA/NV issued subordinated debt securities for an aggregate principal amount of EUR 750 million in the form of Perpetual Subordinated Fixed Rate Resettable Temporary Write- Down Restricted Tier 1 Notes. These notes have a fixed coupon rate of 3.875% payable annually with reset in June 2030 (no step-up) and every 5 years thereafter. They have no scheduled maturity date and, except in certain limited circumstances, may not be redeemed by ageas SA/NV before the six month period preceding June 2030. They qualify as restricted Tier 1 capital for both Ageas Group and ageas SA/NV under Solvency II and are rated BBB+ by Standard & Poor’s and BBB by Fitch. They are listed on the regulated market of the Luxembourg Stock Exchange. The net proceeds from the issuance of this instrument were used for general corporate purposes and to strengthen the regulatory solvency of the Ageas Group and its operating subsidiaries, including by way of replacing the FRESH securities that were tendered as part of the offer launched by Ageas in 2019 (see 20.1). NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 218 Ageas Annual Report 2021 Subordinated liabilities 218 | 240 31 December 2021 31 December 2020 Issued by Ageasfinlux S.A. FRESH Restricted Tier 1 Notes 384 384 Issued by ageas SA/NV Perpetual Subordinated Fixed Rate Resettable Temporary Write-Down Restricted Tier 1 Notes 744 750 Subordinated Fixed to Floating Rate Tier 2 Notes 989 994 Issued by AG Insurance Subordinated Fixed to Floating Rate Tier 2 Loan 74 74 Fixed Rate Reset Dated Subordinated Tier 2 Notes 398 397 Fixed to Floating Callable Subordinated Tier 2 Notes 100 100 Issued by Millenniumbcp Ageas Fixed to Floating Rate Callable Subordinated Restricted Tier 1 Loan 59 59 Total subordinated liabilities 2,748 2,758 31 December 2021 31 December 2020 Balance as at 1 January 2,758 3,117 Proceeds from issuance 498 Redemption (507) Realised Gains (359) Foreign exchange differences and other (10) 9 Balance as at 31 December 2,748 2,758 Most of the outstanding subordinated liabilities as at 31 December 2021 are positions with a maturity of more than 5 years. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 20 Subordinated liabilities 219 | 240 20.1 FRESH Grandfathered Restricted Tier 1 Notes On 7 May 2002, Ageasfinlux SA issued undated Floating Rate Equity- linked Subordinated Hybrid capital securities (FRESH) for a total principal amount of EUR 1,250 million at a floating rate of 3 month Euribor + 135 basis points. The securities have no maturity date, but may be exchanged for Ageas shares at a price of EUR 315 per share at the discretion of the holder. The securities will automatically convert into Ageas shares if the price of the Ageas share is equal to or higher than EUR 472.50 on twenty consecutive stock exchange business days. The securities qualify as Grandfathered Tier 1 capital under Solvency II and is rated A- by Standard & Poor’s, Baa2 by Moody’s and BBB by Fitch. The securities were issued by Ageasfinlux SA, with ageas SA/NV acting as co-obligor. The principal amount of the securities will not be repaid in cash. The sole recourse of the holders of the FRESH against the co- obligor with respect to the principal amount are the currently outstanding 1.2 million Ageas shares that Ageasfinlux SA pledges in favour of such holders. Pending the exchange of the FRESH for Ageas shares, these Ageas shares do not have any dividend rights or voting rights (the reported number of outstanding Ageas shares as at 31 December 2021 already includes the 1.2 million Ageas shares issued for the purpose of such exchange). In the event that dividends are not paid on the Ageas shares, or that the dividends to be declared are below a threshold with respect to any financial year (dividend yield less than 0.5%) and in certain other exceptional circumstances, payment of coupons will be made in accordance with the so-called alternative coupon settlement method (ACSM). The ACSM implies that new Ageas shares will be issued and delivered to the holders of the FRESH. To date all coupons have been paid in cash. If the ACSM is triggered and there is insufficient available authorised capital to enable ageas SA/NV to meet the ACSM obligation, the coupon settlement will be postponed until such time as the ability to issue shares is restored. On 19 November 2019 Ageas launched, through its wholly owned subsidiary Ageasfinlux S.A., an offer to purchase in cash any and all of the outstanding FRESH securities. Ageasfinlux S.A. simultaneously launched a consent solicitation to permit the purchase of the FRESH securities. Consent of at least a majority of the aggregate principal amount of the FRESH outstanding was necessary for the proposed amendment to the conditions of the FRESH to be adopted. On 3 January 2020, Ageas announced that in total 65.50% (EUR 818,750,000) of the aggregate principal amount of the FRESH securities outstanding were tendered and accepted for purchase. Subsequently, at the beginning of Q2 2020 Ageas purchased FRESH securities representing an aggregate principal amount of EUR 47,250,000 following a reverse inquiry by a third-party holder. Please refer to note 32 for the resulting impact on profit or loss of these FRESH tenders. All the purchased FRESH securities in 2020 were exchanged into 2,749,206 underlying shares of ageas SA/NV. These shares are recognised on the Group’s balance sheet as treasury shares and are not entitled to dividends or voting rights. The total number of outstanding shares of ageas SA/NV as an effect from the operation remains unchanged. 20.2 Subordinated Fixed to Floating Rate Tier 2 Notes On 24 November 2020 ageas SA/NV issued debt securities in the form of EUR 500 million Subordinated Fixed to Floating Rate Tier 2 Notes maturing in 2051. The Notes have a fixed coupon rate of 1.875 % payable annually until the first reset date (24 November 2031). As of the first reset date, the coupon becomes payable quarterly at a 3-month Euribor floating rate increased with an initial credit spread and a 100 basis points step-up. Note that Ageas at its option may choose to call the instrument as of 24 May 2031, which is 6 months prior to the first reset date. The instrument qualifies as Tier 2 capital for both Ageas Group and ageas SA/NV under Solvency II and is rated A- by both Standard & Poor’s and Fitch. The instrument is listed on the regulated market of the Luxembourg Stock Exchange. 20.3 Perpetual Subordinated Fixed Rate Resettable Temporary Write-Down Restricted Tier 1 Notes On 10 December 2019 ageas SA/NV issued subordinated debt securities for an aggregate principal amount of EUR 750 million in the form of Perpetual Subordinated Fixed Rate Resettable Temporary Write- Down Restricted Tier 1 Notes. These notes have a fixed coupon rate of 3.875% payable annually with reset in June 2030 (no step-up) and every 5 years thereafter. They have no scheduled maturity date and, except in certain limited circumstances, may not be redeemed by ageas SA/NV before the six month period preceding June 2030. They qualify as restricted Tier 1 capital for both Ageas Group and ageas SA/NV under Solvency II and are rated BBB+ by Standard & Poor’s and BBB by Fitch. They are listed on the regulated market of the Luxembourg Stock Exchange. The net proceeds from the issuance of this instrument were used for general corporate purposes and to strengthen the regulatory solvency of the Ageas Group and its operating subsidiaries, including by way of replacing the FRESH securities that were tendered as part of the offer launched by Ageas in 2019 (see 20.1). 219 Ageas Annual Report 2021 220 | 240 20.4 Subordinated Fixed to Floating Rate Tier 2 Notes On 10 April 2019 ageas SA/NV issued its inaugural debt securities in the form of EUR 500 million Subordinated Fixed to Floating Rate Tier 2 Notes maturing in 2049. These notes have a fixed coupon rate of 3.25 % payable annually until the first call date (2 July 2029). As of the first call date, the coupon becomes payable quarterly at a 3-month Euribor floating rate increased with an initial credit spread and a 100 basis points step-up. This instrument qualifies as Tier 2 capital for both Ageas Group and ageas SA/NV under Solvency II and is rated A- by both Standard & Poor’s and Fitch. It is listed on the regulated market of the Luxembourg Stock Exchange. 20.5 Subordinated Fixed to Floating Rate Tier 2 Loan On 27 June 2019, Ageas and BNP Paribas Cardif granted a EUR 300 million (Ageas: EUR 225 million; BNP Paribas Cardif: EUR 75 million) subordinated loan to AG Insurance as a partial replacement for the USD 550 million which had been redeemed in March 2019. The intercompany loan between Ageas and AG Insurance is eliminated at Ageas group level. 20.6 Fixed Rate Reset Dated Subordinated Tier 2 Notes On 31 March 2015, AG Insurance issued EUR 400 million Fixed Rate Subordinated Tier 2 Securities at an interest rate of 3.5% and with a maturity of 32 years. The securities may be redeemed at the option of AG Insurance, in whole but not in part, on the first call date at 30 June 2027 or at any interest payment date thereafter. On the first call date and on each fifth anniversary of the first call date the interest rate will be reset equal to the sum of the five-year euro mid swap rate plus 3.875%. The Notes are listed on the Luxembourg Stock Exchange and qualify as Tier 2 capital under Solvency II. They are rated A- by both Standard & Poor’s and Fitch. 20.7 Fixed-to Floating Callable Subordinated Tier 2 Notes On 18 December 2013, AG Insurance issued EUR 450 million Fixed-to- Floating Callable Subordinated Tier 2 Notes due at an interest rate of 5.25% and with a maturity of 31 years. The notes may be redeemed at the option of AG Insurance, in whole but not in part, on the first call date at 18 June 2024 or at any interest payment date thereafter. On their first call date the Notes will bear interest at a floating rate of 3 month Euribor plus 4.136% per annum, payable quarterly. The Notes are subscribed by ageas SA/NV (EUR 350 million) and by BNP Paribas Fortis SA/NV (EUR 100 million) and are listed on the Luxembourg Stock Exchange. The Notes qualify as Tier 2 under Solvency II and are rated A- by both Standard & Poor’s and Fitch. The part underwritten by ageas SA/NV is eliminated as intercompany transaction. 20.8 Fixed-to-Floating Callable Subordinated Grandfathered Restricted Tier 1 Loan On 5 December 2014, Ageas Insurance International N.V. (51%) (AII) and BCP Investments B.V. (49%) granted a subordinated loan of EUR 120 million to Millenniumbcp Ageas at 4.75% per annum up to the first call date in December 2019 and 6 month Euribor + 475 basis points per annum thereafter. As of Q2 2020 the loan previously owned by Ageas Insurance International has been transferred to the balance sheet of ageas SA/NV. The part underwritten by ageas SA/NV is eliminated because it is an intercompany transaction. The Notes qualify as Grandfathered Tier 1 capital under Solvency II. 221 | 240 31 December 2021 31 December 2020 Repurchase agreements 2,078 2,312 Loans 838 898 Due to banks 2,916 3,210 Funds held under reinsurance agreements 74 77 Lease liabilities 560 570 Other borrowings 66 63 Total borrowings 3,616 3,920 Repurchase agreements are essentially secured short-term loans that are used to hedge specific investments with resettable interest rates and for cash management purposes. Ageas has pledged property as collateral for loans and other with a carrying amount of EUR 166 million (2020: EUR 173 million). The carrying value of the borrowings is a reasonable approximation of their fair value as contract maturities are less than one year (repurchase agreements) and/or contracts carry a floating rate (loans from banks). Accordingly, the fair value is based upon observable market data (level 2). The lease liabilities are discounted using the lessee’s incremental borrowing rate and the interest expense on the lease liability is presented separately from the depreciation expense of the right-of- use asset. 31 December 2021 31 December 2020 Balance as at 1 January 3,920 2,956 Proceeds from issuance 73 1,053 Payments (375) (90) Foreign exchange differences and other changes (2) 1 Balance as at 31 December 3,616 3,920 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 21 Borrowings NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 220 Ageas Annual Report 2021 220 | 240 20.4 Subordinated Fixed to Floating Rate Tier 2 Notes On 10 April 2019 ageas SA/NV issued its inaugural debt securities in the form of EUR 500 million Subordinated Fixed to Floating Rate Tier 2 Notes maturing in 2049. These notes have a fixed coupon rate of 3.25 % payable annually until the first call date (2 July 2029). As of the first call date, the coupon becomes payable quarterly at a 3-month Euribor floating rate increased with an initial credit spread and a 100 basis points step-up. This instrument qualifies as Tier 2 capital for both Ageas Group and ageas SA/NV under Solvency II and is rated A- by both Standard & Poor’s and Fitch. It is listed on the regulated market of the Luxembourg Stock Exchange. 20.5 Subordinated Fixed to Floating Rate Tier 2 Loan On 27 June 2019, Ageas and BNP Paribas Cardif granted a EUR 300 million (Ageas: EUR 225 million; BNP Paribas Cardif: EUR 75 million) subordinated loan to AG Insurance as a partial replacement for the USD 550 million which had been redeemed in March 2019. The intercompany loan between Ageas and AG Insurance is eliminated at Ageas group level. 20.6 Fixed Rate Reset Dated Subordinated Tier 2 Notes On 31 March 2015, AG Insurance issued EUR 400 million Fixed Rate Subordinated Tier 2 Securities at an interest rate of 3.5% and with a maturity of 32 years. The securities may be redeemed at the option of AG Insurance, in whole but not in part, on the first call date at 30 June 2027 or at any interest payment date thereafter. On the first call date and on each fifth anniversary of the first call date the interest rate will be reset equal to the sum of the five-year euro mid swap rate plus 3.875%. The Notes are listed on the Luxembourg Stock Exchange and qualify as Tier 2 capital under Solvency II. They are rated A- by both Standard & Poor’s and Fitch. 20.7 Fixed-to Floating Callable Subordinated Tier 2 Notes On 18 December 2013, AG Insurance issued EUR 450 million Fixed-to- Floating Callable Subordinated Tier 2 Notes due at an interest rate of 5.25% and with a maturity of 31 years. The notes may be redeemed at the option of AG Insurance, in whole but not in part, on the first call date at 18 June 2024 or at any interest payment date thereafter. On their first call date the Notes will bear interest at a floating rate of 3 month Euribor plus 4.136% per annum, payable quarterly. The Notes are subscribed by ageas SA/NV (EUR 350 million) and by BNP Paribas Fortis SA/NV (EUR 100 million) and are listed on the Luxembourg Stock Exchange. The Notes qualify as Tier 2 under Solvency II and are rated A- by both Standard & Poor’s and Fitch. The part underwritten by ageas SA/NV is eliminated as intercompany transaction. 20.8 Fixed-to-Floating Callable Subordinated Grandfathered Restricted Tier 1 Loan On 5 December 2014, Ageas Insurance International N.V. (51%) (AII) and BCP Investments B.V. (49%) granted a subordinated loan of EUR 120 million to Millenniumbcp Ageas at 4.75% per annum up to the first call date in December 2019 and 6 month Euribor + 475 basis points per annum thereafter. As of Q2 2020 the loan previously owned by Ageas Insurance International has been transferred to the balance sheet of ageas SA/NV. The part underwritten by ageas SA/NV is eliminated because it is an intercompany transaction. The Notes qualify as Grandfathered Tier 1 capital under Solvency II. 221 | 240 31 December 2021 31 December 2020 Repurchase agreements 2,078 2,312 Loans 838 898 Due to banks 2,916 3,210 Funds held under reinsurance agreements 74 77 Lease liabilities 560 570 Other borrowings 66 63 Total borrowings 3,616 3,920 Repurchase agreements are essentially secured short-term loans that are used to hedge specific investments with resettable interest rates and for cash management purposes. Ageas has pledged property as collateral for loans and other with a carrying amount of EUR 166 million (2020: EUR 173 million). The carrying value of the borrowings is a reasonable approximation of their fair value as contract maturities are less than one year (repurchase agreements) and/or contracts carry a floating rate (loans from banks). Accordingly, the fair value is based upon observable market data (level 2). The lease liabilities are discounted using the lessee’s incremental borrowing rate and the interest expense on the lease liability is presented separately from the depreciation expense of the right-of- use asset. 31 December 2021 31 December 2020 Balance as at 1 January 3,920 2,956 Proceeds from issuance 73 1,053 Payments (375) (90) Foreign exchange differences and other changes (2) 1 Balance as at 31 December 3,616 3,920 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 21 Borrowings 221 Ageas Annual Report 2021 Borrowings 222 | 240 The following table shows the undiscounted cash flows of the borrowings, except for lease liabilities, classified by relevant maturity group as at 31 December. 31 December 2021 31 December 2020 Less than 1 year 2,898 2,554 1 year to 3 years 28 358 3 years to 5 years 36 310 More than 5 years 94 128 Total 3,056 3,350 Lease obligations as lessee (undiscounted) Minimum lease payments 2021 2020 Less than 1 year 80 82 1 year to 2 years 77 74 2 years to 3 years 64 72 3 years to 4 years 58 58 4 years to 5 years 47 51 More than 5 years 440 441 Total 766 778 Annual rental expense 6 5 Future finance charges 206 208 223 | 240 The components of deferred tax assets and deferred tax liabilities as at 31 December are shown below. Statement of financial position Income statement 2021 2020 2021 2020 Deferred tax assets related to: Financial investments (available for sale) 14 13 1 8 Investment property 13 9 4 1 Loans to customers 2 2 1 Property, plant and equipment 42 41 (1) Intangible assets (excluding goodwill) 8 8 Insurance policy and claim reserves 664 1,111 (15) Debt certificates and subordinated liabilities Provisions for pensions and post-retirement benefits 84 121 6 Other provisions 8 10 (1) Accrued expenses and deferred income 1 (1) 1 Unused tax losses 106 98 4 (6) Other 100 98 2 3 Gross deferred tax assets 1,041 1,512 9 (2) Unrecognised deferred tax assets (28) (27) Net deferred tax assets 1,013 1,485 9 (2) Deferred tax liabilities related to: Financial investments (available for sale) 1,489 2,079 (2) (3) Investment property 98 94 (3) 5 Loans to customers 2 1 (1) Property, plant and equipment 124 135 9 4 Intangible assets (excluding goodwill) 80 84 3 4 Debt certificates and subordinated liabilities 1 Other provisions 11 7 (4) (10) Deferred policy acquisition costs 36 33 (3) (1) Deferred expense and accrued income 1 1 Tax exempt realised reserves 21 23 2 2 Other 21 34 6 7 Total deferred tax liabilities 1,884 2,492 7 8 Deferred tax income (expense) 16 6 Net deferred tax (871) (1,007) Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 22 Current and deferred tax assets and liabilities NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 222 Ageas Annual Report 2021 222 | 240 The following table shows the undiscounted cash flows of the borrowings, except for lease liabilities, classified by relevant maturity group as at 31 December. 31 December 2021 31 December 2020 Less than 1 year 2,898 2,554 1 year to 3 years 28 358 3 years to 5 years 36 310 More than 5 years 94 128 Total 3,056 3,350 Lease obligations as lessee (undiscounted) Minimum lease payments 2021 2020 Less than 1 year 80 82 1 year to 2 years 77 74 2 years to 3 years 64 72 3 years to 4 years 58 58 4 years to 5 years 47 51 More than 5 years 440 441 Total 766 778 Annual rental expense 6 5 Future finance charges 206 208 223 | 240 The components of deferred tax assets and deferred tax liabilities as at 31 December are shown below. Statement of financial position Income statement 2021 2020 2021 2020 Deferred tax assets related to: Financial investments (available for sale) 14 13 1 8 Investment property 13 9 4 1 Loans to customers 2 2 1 Property, plant and equipment 42 41 (1) Intangible assets (excluding goodwill) 8 8 Insurance policy and claim reserves 664 1,111 (15) Debt certificates and subordinated liabilities Provisions for pensions and post-retirement benefits 84 121 6 Other provisions 8 10 (1) Accrued expenses and deferred income 1 (1) 1 Unused tax losses 106 98 4 (6) Other 100 98 2 3 Gross deferred tax assets 1,041 1,512 9 (2) Unrecognised deferred tax assets (28) (27) Net deferred tax assets 1,013 1,485 9 (2) Deferred tax liabilities related to: Financial investments (available for sale) 1,489 2,079 (2) (3) Investment property 98 94 (3) 5 Loans to customers 2 1 (1) Property, plant and equipment 124 135 9 4 Intangible assets (excluding goodwill) 80 84 3 4 Debt certificates and subordinated liabilities 1 Other provisions 11 7 (4) (10) Deferred policy acquisition costs 36 33 (3) (1) Deferred expense and accrued income 1 1 Tax exempt realised reserves 21 23 2 2 Other 21 34 6 7 Total deferred tax liabilities 1,884 2,492 7 8 Deferred tax income (expense) 16 6 Net deferred tax (871) (1,007) Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 22 Current and deferred tax assets and liabilities 223 Ageas Annual Report 2021 Current and deferred tax assets and liabilities 224 | 240 Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority. The amounts in the statement of financial position after such offsetting are as follows. 2021 2020 Deferred tax asset 100 98 Deferred tax liability 971 1,105 Net deferred tax (871) (1,007) As at 31 December 2021, the current and deferred tax recorded in total equity amount to EUR 42 million and EUR 900 million respectively. (2020: EUR 54 million and EUR 1,050 million) Deferred tax assets are recognised to the extent that it is probable that there will be sufficient future taxable profit against which the deferred tax asset can be utilised. Deferred tax assets have been recognised on unused (claimed) tax losses and unused tax credits at an estimated tax value of EUR 79 million (2020: EUR 71 million). The tax losses that have not been recognised amount to EUR 3,200 million at 31 December 2021 (2020: EUR 3,308 million). Most of the (claimed) tax loss carry forward position originates from the liquidation of Brussels Liquidation Holding (the former Fortis Brussels, the company that held the Fortis banking operations). Tax-wise, the loss on the sale of the Fortis Bank only materialised at the moment of liquidation. 225 | 240 The RPN(I) is a financial instrument that results in quarterly payments being made to, or received from, BNP Paribas Fortis SA/NV. BNP Paribas Fortis SA/NV issued CASHES securities in 2007 with ageas SA/NV as co-obligor. CASHES are convertible securities that convert into Ageas shares at a pre-set price of EUR 239.40 per share. BNP Paribas Fortis SA/NV and ageas SA/NV, at that point in time both parts of the Fortis Group, introduced a Relative Performance Note, designed to avoid accounting volatility on the Ageas shares and on the at fair value valued CASHES in the books of BNP Paribas Fortis SA/NV. Upon the break-up of Fortis in 2009, BNP Paribas Fortis SA/NV and Ageas agreed to pay interest on a reference amount stated in this Relative Performance Note. The quarterly interest payment is valued as a financial instrument and referred to as RPN(I). The RPN(I) exists to the extent that CASHES securities remain outstanding in the market. Originally, 12,000 CASHES securities were issued in 2007. In February 2012 BNP Paribas launched a public tender on CASHES at a price of 47.5% and converted 7,553 tendered CASHES securities into Ageas shares; Ageas agreed to pay a EUR 287 million indemnity to BNP Paribas as the conversion triggered a pro rata cancellation of the RPN(I) liability. In May 2015 Ageas and BNP Paribas agreed that BNP Paribas can purchase CASHES from individual investors at any given time, under the condition that the purchased securities are converted into Ageas shares; at such conversion the pro rata part of the RPN(I) liability is paid to BNP Paribas, while Ageas receives a break-up fee which is subject to the price at which BNP Paribas succeeds to purchase CASHES. BNP Paribas purchased and converted 656 CASHES under this agreement in the first nine months 2016; Ageas paid EUR 44 million for the pro rata settlement of the RPN(I), after the deduction of the received break-up fee. The agreement between Ageas and BNP Paribas expired at year-end 2016 and has not been renewed. At 31 December 2021, 3,791 CASHES remained outstanding. Reference amount and interest paid The reference amount is calculated as follows:  the difference between EUR 2,350 million and the market value of 13 million Ageas shares in which the instrument converts, less  the difference between EUR 3,000 million par issuance and the market value of the CASHES as quoted by the Luxembourg Stock Exchange, multiplied by  the number of CASHES securities outstanding (3,791 at 31 December 2021) divided by the number of CASHES securities originally issued (12,000). Ageas pays interest to BNP Paribas Fortis SA/NV on the average reference amount in the quarter (if the above outcome becomes negative BNP Paribas Fortis SA/NV will pay Ageas); the interest amounts to 3 month Euribor plus 90 basis points. Ageas pledged 6.3% of the total AG Insurance shares outstanding in favour of BNP Paribas Fortis SA/NV. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 23 RPN (I) NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 224 Ageas Annual Report 2021 224 | 240 Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority. The amounts in the statement of financial position after such offsetting are as follows. 2021 2020 Deferred tax asset 100 98 Deferred tax liability 971 1,105 Net deferred tax (871) (1,007) As at 31 December 2021, the current and deferred tax recorded in total equity amount to EUR 42 million and EUR 900 million respectively. (2020: EUR 54 million and EUR 1,050 million) Deferred tax assets are recognised to the extent that it is probable that there will be sufficient future taxable profit against which the deferred tax asset can be utilised. Deferred tax assets have been recognised on unused (claimed) tax losses and unused tax credits at an estimated tax value of EUR 79 million (2020: EUR 71 million). The tax losses that have not been recognised amount to EUR 3,200 million at 31 December 2021 (2020: EUR 3,308 million). Most of the (claimed) tax loss carry forward position originates from the liquidation of Brussels Liquidation Holding (the former Fortis Brussels, the company that held the Fortis banking operations). Tax-wise, the loss on the sale of the Fortis Bank only materialised at the moment of liquidation. 225 | 240 The RPN(I) is a financial instrument that results in quarterly payments being made to, or received from, BNP Paribas Fortis SA/NV. BNP Paribas Fortis SA/NV issued CASHES securities in 2007 with ageas SA/NV as co-obligor. CASHES are convertible securities that convert into Ageas shares at a pre-set price of EUR 239.40 per share. BNP Paribas Fortis SA/NV and ageas SA/NV, at that point in time both parts of the Fortis Group, introduced a Relative Performance Note, designed to avoid accounting volatility on the Ageas shares and on the at fair value valued CASHES in the books of BNP Paribas Fortis SA/NV. Upon the break-up of Fortis in 2009, BNP Paribas Fortis SA/NV and Ageas agreed to pay interest on a reference amount stated in this Relative Performance Note. The quarterly interest payment is valued as a financial instrument and referred to as RPN(I). The RPN(I) exists to the extent that CASHES securities remain outstanding in the market. Originally, 12,000 CASHES securities were issued in 2007. In February 2012 BNP Paribas launched a public tender on CASHES at a price of 47.5% and converted 7,553 tendered CASHES securities into Ageas shares; Ageas agreed to pay a EUR 287 million indemnity to BNP Paribas as the conversion triggered a pro rata cancellation of the RPN(I) liability. In May 2015 Ageas and BNP Paribas agreed that BNP Paribas can purchase CASHES from individual investors at any given time, under the condition that the purchased securities are converted into Ageas shares; at such conversion the pro rata part of the RPN(I) liability is paid to BNP Paribas, while Ageas receives a break-up fee which is subject to the price at which BNP Paribas succeeds to purchase CASHES. BNP Paribas purchased and converted 656 CASHES under this agreement in the first nine months 2016; Ageas paid EUR 44 million for the pro rata settlement of the RPN(I), after the deduction of the received break-up fee. The agreement between Ageas and BNP Paribas expired at year-end 2016 and has not been renewed. At 31 December 2021, 3,791 CASHES remained outstanding. Reference amount and interest paid The reference amount is calculated as follows:  the difference between EUR 2,350 million and the market value of 13 million Ageas shares in which the instrument converts, less  the difference between EUR 3,000 million par issuance and the market value of the CASHES as quoted by the Luxembourg Stock Exchange, multiplied by  the number of CASHES securities outstanding (3,791 at 31 December 2021) divided by the number of CASHES securities originally issued (12,000). Ageas pays interest to BNP Paribas Fortis SA/NV on the average reference amount in the quarter (if the above outcome becomes negative BNP Paribas Fortis SA/NV will pay Ageas); the interest amounts to 3 month Euribor plus 90 basis points. Ageas pledged 6.3% of the total AG Insurance shares outstanding in favour of BNP Paribas Fortis SA/NV. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 23 RPN (I) 225 Ageas Annual Report 2021 RPN (I) 226 | 240 Valuation Ageas applies a transfer notion to arrive at the fair value of the RPN(I) liability. Fair value is defined in IFRS 13 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The definition is explicitly described as an exit price, linked with the price 'paid to transfer a liability'. When such pricing is not available and the liability is held by another entity as an asset, the liability needs to be valued from the perspective of the market participant that holds the asset. Ageas values its liability at the reference amount. The RPN reference amount is based on the CASHES price and Ageas share price. The reference amount increased from EUR 420 million at year-end 2020 to EUR 520.4 million at 31 December 2021, predominantly driven by the increase in CASHES price from 84.17% at 31 December 2020 to 95.61% at 31 December 2021, which was only partly compensated by the increase of the Ageas share price from EUR 43.58 to EUR 45.55 over the same period. Sensitivity of RPN(I) Value At 31 December 2021, each 1% increase in the CASHES price, expressed as a percentage of its par value, leads to an increase of EUR 9.5 million in the reference amount, while each EUR 1.00 increase in the Ageas share price decreases the reference amount by EUR 4 million. 227 | 240 31 December 2021 31 December 2020 Deferred revenues 155 139 Accrued finance costs 50 57 Accrued other expenses 101 99 Derivatives held for hedging purposes 26 27 Derivatives held for trading 15 8 Defined benefit pension liabilities 808 870 Defined benefit liabilities other than pension 137 153 Termination benefits 5 4 Other long-term employee benefit liabilities 17 18 Short-term employee benefit liabilities 107 92 Liabilities related to written put options on NCI 108 101 Accounts payable 213 261 Due to agents, policyholders and intermediaries 485 509 VAT and other taxes payable 167 149 Dividends payable 16 16 Due to reinsurers 25 31 Other liabilities 399 400 Total 2,834 2,934 Details of employee benefit liabilities can be found in note 6 section 6.1 Employee benefits. The line item ‘Other liabilities’ includes payables related to the clearing of securities transactions, cash received awaiting allocation to investments and small expenses to be paid. Deferred revenues and accrued amounts are considered to be short term liabilities with a maturity of less than one year. The following tables show the undiscounted cash flows of Accounts payable, Due to agents, policy holders and intermediaries, VAT and other tax payable, Dividends payable, Due to reinsurers and other liabilities classified by relevant maturity group. 31 December 2021 Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Undiscounted cashflow 1,118 149 3 31 Total 1,118 149 3 31 31 December 2020 Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Undiscounted cashflow 1,162 169 4 33 Total 1,162 169 4 33 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 24 Accr ued interest and other liabilities NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 226 Ageas Annual Report 2021 226 | 240 Valuation Ageas applies a transfer notion to arrive at the fair value of the RPN(I) liability. Fair value is defined in IFRS 13 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The definition is explicitly described as an exit price, linked with the price 'paid to transfer a liability'. When such pricing is not available and the liability is held by another entity as an asset, the liability needs to be valued from the perspective of the market participant that holds the asset. Ageas values its liability at the reference amount. The RPN reference amount is based on the CASHES price and Ageas share price. The reference amount increased from EUR 420 million at year-end 2020 to EUR 520.4 million at 31 December 2021, predominantly driven by the increase in CASHES price from 84.17% at 31 December 2020 to 95.61% at 31 December 2021, which was only partly compensated by the increase of the Ageas share price from EUR 43.58 to EUR 45.55 over the same period. Sensitivity of RPN(I) Value At 31 December 2021, each 1% increase in the CASHES price, expressed as a percentage of its par value, leads to an increase of EUR 9.5 million in the reference amount, while each EUR 1.00 increase in the Ageas share price decreases the reference amount by EUR 4 million. 227 | 240 31 December 2021 31 December 2020 Deferred revenues 155 139 Accrued finance costs 50 57 Accrued other expenses 101 99 Derivatives held for hedging purposes 26 27 Derivatives held for trading 15 8 Defined benefit pension liabilities 808 870 Defined benefit liabilities other than pension 137 153 Termination benefits 5 4 Other long-term employee benefit liabilities 17 18 Short-term employee benefit liabilities 107 92 Liabilities related to written put options on NCI 108 101 Accounts payable 213 261 Due to agents, policyholders and intermediaries 485 509 VAT and other taxes payable 167 149 Dividends payable 16 16 Due to reinsurers 25 31 Other liabilities 399 400 Total 2,834 2,934 Details of employee benefit liabilities can be found in note 6 section 6.1 Employee benefits. The line item ‘Other liabilities’ includes payables related to the clearing of securities transactions, cash received awaiting allocation to investments and small expenses to be paid. Deferred revenues and accrued amounts are considered to be short term liabilities with a maturity of less than one year. The following tables show the undiscounted cash flows of Accounts payable, Due to agents, policy holders and intermediaries, VAT and other tax payable, Dividends payable, Due to reinsurers and other liabilities classified by relevant maturity group. 31 December 2021 Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Undiscounted cashflow 1,118 149 3 31 Total 1,118 149 3 31 31 December 2020 Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Undiscounted cashflow 1,162 169 4 33 Total 1,162 169 4 33 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 24 Accr ued interest and other liabilities 227 Ageas Annual Report 2021 Accrued interest and other liabilities 228 | 240 The provisions mainly relate to legal disputes and reorganisations and are based on best estimates available at period-end based on management judgement, in most cases supported by the opinion of legal advisors. The timing of the outflow of cash related to these provisions is by nature uncertain given the unpredictability of the outcome and the time involved in concluding litigations/disputes. We refer to note 43 Contingent liabilities, which describes the various ongoing litigation proceedings. Global settlement related to the Fortis events of 2007 and 2008 On 14 March 2016, Ageas and the claimant organisations, Deminor, Stichting FortisEffect, Stichting Investor Claims Against Fortis (SICAF) and VEB announced a settlement proposal (the “Settlement”) with respect to all civil proceedings related to the former Fortis group for events in 2007 and 2008 for an amount of EUR 1.2 billion. In addition, Ageas announced on 14 March 2016 that it also reached an agreement with the D&O Insurers, the D&O's involved in litigation and BNP Paribas Fortis to settle for an amount of EUR 290 million. On 24 March 2017, the Amsterdam Appeal Court held a public hearing during which it heard the request to declare the Settlement binding as well as the arguments that were submitted against it. On 16 June 2017, the Court took the interim decision not to declare the settlement binding in its initial format. On 12 December 2017, the petitioners filed an amended and restated settlement with the Amsterdam Appeal Court. This amended settlement took into consideration the main concerns of the Court and the overall budget was raised by EUR 100 million to EUR 1.3 billion. On 13 July 2018 the Amsterdam Appeal Court declared the settlement binding on Eligible Shareholders (i.e. persons who held Fortis shares at any time between close of business on 28 February 2007 and close of business on 14 October 2008) in accordance with the Dutch Act on Collective Settlement of Mass Claims (Wet Collectieve Afwikkeling Massaschade, "WCAM"). In declaring the settlement binding, the Court believed the compensation offered under the settlement is reasonable and that the claimant organisations Deminor, SICAF and FortisEffect are sufficiently representative of the interests of the beneficiaries of the Settlement. On 21 December 2018, Ageas announced that it had decided to provide clarity ahead of time by waiving its termination right. As a consequence of this the Settlement is final. The claims filing period started on 27 July 2018 and ended on 28 July 2019. As at 31 December 2021, an amount of EUR 1,199 million had already been paid out to Eligible Shareholders. The main components of the EUR 114 million provision as at 31 December 2021 (31 December 2020: 246 million) are:  EUR 1,309 million related to the WCAM settlement agreement;  EUR 5 million related to the tail risk, including accrued expenses;  minus EUR 1,199 million already paid to eligible shareholders. The amounts are presented under the line item ‘Provisions’ in the statement of financial position and the line item ‘Change in provisions’ in the income statement. Changes in provisions during the year are as follows. 31 December 2021 31 December 2020 Balance as at 1 January 322 582 Acquisition and divestment of subsidiaries Increase (Decrease) in provisions (15) (36) Utilised during the year (127) (223) Foreign exchange differences and other 2 (1) Balance as at 31 December 182 322 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 25 Provisions 229 | 240 The following table provides information about the most significant non-controlling interests (NCI) in Ageas’s entities. Result Equity Result Equity % of non- as at as at % of non- as at as at controlling 31 Dec. 31 Dec. Controlling 31 Dec. 31 Dec. interest 2021 2021 interest 2020 2020 Group company AG Insurance (Belgium) 25.0% 95 1,617 25.0% 97 1,637 AG Real Estate (part of AG Insurance) mainly Interparking NCI for 49% held 25.0% 43 352 25.0% 24 322 by minority shareholders of AG Real Estate Millenniumbcp Ageas (part of CEU) 49.0% 34 286 49.0% 39 258 Other (1) 3 (1) 2 Total NCI 171 2,258 159 2,219 Non-controlling interest (NCI) represents the participation of a third party in the shareholders’ equity of Ageas’s subsidiaries. AG Insurance granted to Parkimo, a minority shareholder of Interparking, an unconditional put option on its 10.05% ownership in interparking. The put option was measured at fair value of the expected settlement amounting to EUR 109 million (2020: EUR 100 million). Subsidiaries The details of the statement of financial position of AG Insurance are included in note 8 Information on operating segments. Details of the other subsidiary of Ageas in which non-controlling interests are held are: Assets Liabilities Equity Assets Liabilities Equity as at as at as at as at as at as at Financial information 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. (100% interest) 2021 2021 2021 2020 2020 2020 Subsidiary Millenniumbcp Ageas 10,226 9,846 379 10,848 10,526 322 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 26 Non- controlling interest NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 228 Ageas Annual Report 2021 Provisions 228 | 240 The provisions mainly relate to legal disputes and reorganisations and are based on best estimates available at period-end based on management judgement, in most cases supported by the opinion of legal advisors. The timing of the outflow of cash related to these provisions is by nature uncertain given the unpredictability of the outcome and the time involved in concluding litigations/disputes. We refer to note 43 Contingent liabilities, which describes the various ongoing litigation proceedings. Global settlement related to the Fortis events of 2007 and 2008 On 14 March 2016, Ageas and the claimant organisations, Deminor, Stichting FortisEffect, Stichting Investor Claims Against Fortis (SICAF) and VEB announced a settlement proposal (the “Settlement”) with respect to all civil proceedings related to the former Fortis group for events in 2007 and 2008 for an amount of EUR 1.2 billion. In addition, Ageas announced on 14 March 2016 that it also reached an agreement with the D&O Insurers, the D&O's involved in litigation and BNP Paribas Fortis to settle for an amount of EUR 290 million. On 24 March 2017, the Amsterdam Appeal Court held a public hearing during which it heard the request to declare the Settlement binding as well as the arguments that were submitted against it. On 16 June 2017, the Court took the interim decision not to declare the settlement binding in its initial format. On 12 December 2017, the petitioners filed an amended and restated settlement with the Amsterdam Appeal Court. This amended settlement took into consideration the main concerns of the Court and the overall budget was raised by EUR 100 million to EUR 1.3 billion. On 13 July 2018 the Amsterdam Appeal Court declared the settlement binding on Eligible Shareholders (i.e. persons who held Fortis shares at any time between close of business on 28 February 2007 and close of business on 14 October 2008) in accordance with the Dutch Act on Collective Settlement of Mass Claims (Wet Collectieve Afwikkeling Massaschade, "WCAM"). In declaring the settlement binding, the Court believed the compensation offered under the settlement is reasonable and that the claimant organisations Deminor, SICAF and FortisEffect are sufficiently representative of the interests of the beneficiaries of the Settlement. On 21 December 2018, Ageas announced that it had decided to provide clarity ahead of time by waiving its termination right. As a consequence of this the Settlement is final. The claims filing period started on 27 July 2018 and ended on 28 July 2019. As at 31 December 2021, an amount of EUR 1,199 million had already been paid out to Eligible Shareholders. The main components of the EUR 114 million provision as at 31 December 2021 (31 December 2020: 246 million) are:  EUR 1,309 million related to the WCAM settlement agreement;  EUR 5 million related to the tail risk, including accrued expenses;  minus EUR 1,199 million already paid to eligible shareholders. The amounts are presented under the line item ‘Provisions’ in the statement of financial position and the line item ‘Change in provisions’ in the income statement. Changes in provisions during the year are as follows. 31 December 2021 31 December 2020 Balance as at 1 January 322 582 Acquisition and divestment of subsidiaries Increase (Decrease) in provisions (15) (36) Utilised during the year (127) (223) Foreign exchange differences and other 2 (1) Balance as at 31 December 182 322 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 25 Provisions 229 | 240 The following table provides information about the most significant non-controlling interests (NCI) in Ageas’s entities. Result Equity Result Equity % of non- as at as at % of non- as at as at controlling 31 Dec. 31 Dec. Controlling 31 Dec. 31 Dec. interest 2021 2021 interest 2020 2020 Group company AG Insurance (Belgium) 25.0% 95 1,617 25.0% 97 1,637 AG Real Estate (part of AG Insurance) mainly Interparking NCI for 49% held 25.0% 43 352 25.0% 24 322 by minority shareholders of AG Real Estate Millenniumbcp Ageas (part of CEU) 49.0% 34 286 49.0% 39 258 Other (1) 3 (1) 2 Total NCI 171 2,258 159 2,219 Non-controlling interest (NCI) represents the participation of a third party in the shareholders’ equity of Ageas’s subsidiaries. AG Insurance granted to Parkimo, a minority shareholder of Interparking, an unconditional put option on its 10.05% ownership in interparking. The put option was measured at fair value of the expected settlement amounting to EUR 109 million (2020: EUR 100 million). Subsidiaries The details of the statement of financial position of AG Insurance are included in note 8 Information on operating segments. Details of the other subsidiary of Ageas in which non-controlling interests are held are: Assets Liabilities Equity Assets Liabilities Equity as at as at as at as at as at as at Financial information 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. (100% interest) 2021 2021 2021 2020 2020 2020 Subsidiary Millenniumbcp Ageas 10,226 9,846 379 10,848 10,526 322 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 26 Non- controlling interest 229 Ageas Annual Report 2021 Non-controlling interest 230 | 240 Foreign exchange contracts Futures are contracts that require settlement at a specified price and on a specified future date and can be traded in similar markets. Forwards are customised contracts between two entities where settlement takes place on a specific date in the future at today’s pre-agreed price. The currency futures and forward contracts are mainly held to hedge the currency risk on foreign currency denominated assets. Interest rate swaps and cross-currency swaps Swap contracts are agreements between two parties to exchange one set of cash flows for another set of cash flows. Payments are made on the basis of the swap’s notional value. Ageas uses interest rate swap contracts primarily to manage cash flows arising from interest received or paid and cross- currency swap contracts to manage foreign currency denominated cash flows. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 27 Derivatives 231 | 240 Trading derivatives 31 December 2021 31 December 2020 Fair values Fair values Notional Notional Assets Liabilities amount Assets Liabilities amount Foreign exchange contracts Forwards and futures 2 14 346 14 1 560 Swaps 8 6 Total 2 14 354 14 1 566 Interest rate contracts Swaps 4 174 2 7 213 Total 4 174 2 7 213 Equity/Index contracts Options and warrants 10 Total 10 Other 1 Total 6 15 538 16 8 779 Fair values supported by observable market data Fair values obtained using a valuation model 6 15 16 8 Total 6 15 16 8 Over the counter (OTC) 6 15 538 16 8 779 Total 6 15 538 16 8 779 Hedging derivatives 31 December 2021 31 December 2020 Fair values Fair values Notional Notional Assets Liabilities amount Assets Liabilities amount Foreign exchange contracts Forwards and futures 6 12 183 3 140 Total 6 12 183 3 140 Interest rate contracts Swaps 28 14 1,233 27 834 Total 28 14 1,233 27 834 Total 34 26 1,416 3 27 974 Fair values supported by observable market data 11 3 20 Fair values obtained using a valuation model 34 15 7 Total 34 26 3 27 Over the counter (OTC) 34 26 1,416 3 27 974 Total 34 26 1,416 3 27 974 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 230 Ageas Annual Report 2021 Derivatives 230 | 240 Foreign exchange contracts Futures are contracts that require settlement at a specified price and on a specified future date and can be traded in similar markets. Forwards are customised contracts between two entities where settlement takes place on a specific date in the future at today’s pre-agreed price. The currency futures and forward contracts are mainly held to hedge the currency risk on foreign currency denominated assets. Interest rate swaps and cross-currency swaps Swap contracts are agreements between two parties to exchange one set of cash flows for another set of cash flows. Payments are made on the basis of the swap’s notional value. Ageas uses interest rate swap contracts primarily to manage cash flows arising from interest received or paid and cross- currency swap contracts to manage foreign currency denominated cash flows. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 27 Derivatives 231 | 240 Trading derivatives 31 December 2021 31 December 2020 Fair values Fair values Notional Notional Assets Liabilities amount Assets Liabilities amount Foreign exchange contracts Forwards and futures 2 14 346 14 1 560 Swaps 8 6 Total 2 14 354 14 1 566 Interest rate contracts Swaps 4 174 2 7 213 Total 4 174 2 7 213 Equity/Index contracts Options and warrants 10 Total 10 Other 1 Total 6 15 538 16 8 779 Fair values supported by observable market data Fair values obtained using a valuation model 6 15 16 8 Total 6 15 16 8 Over the counter (OTC) 6 15 538 16 8 779 Total 6 15 538 16 8 779 Hedging derivatives 31 December 2021 31 December 2020 Fair values Fair values Notional Notional Assets Liabilities amount Assets Liabilities amount Foreign exchange contracts Forwards and futures 6 12 183 3 140 Total 6 12 183 3 140 Interest rate contracts Swaps 28 14 1,233 27 834 Total 28 14 1,233 27 834 Total 34 26 1,416 3 27 974 Fair values supported by observable market data 11 3 20 Fair values obtained using a valuation model 34 15 7 Total 34 26 3 27 Over the counter (OTC) 34 26 1,416 3 27 974 Total 34 26 1,416 3 27 974 231 Ageas Annual Report 2021 232 | 240 Commitments received and given are detailed as follows. Commitments 31 December 2021 31 December 2020 Commitment Received Credit lines 1,071 1,114 Collateral and guarantees received 4,182 4,435 Other off-balance sheet rights 207 38 Total received 5,460 5,587 Commitment Given Guarantees, Financial and Performance Letters of Credit 199 292 Available credit lines 1,024 982 Collateral and guarantees given 2,184 2,459 Entrusted assets and receivables 738 1,006 Capital rights & commitments 292 189 Real Estate commitments 531 419 Other off-balance sheet commitments 1,297 961 Total given 6,265 6,308 The collateral and guarantees received relate mainly to residential mortgages and to a lesser extent on policyholder loans and commercial loans. Other off-balance sheet commitments as at 31 December 2021 include EUR 521 million in outstanding credit bids (31 December 2020: EUR 185 million). Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 28 Commitments 233 | 240 The following table shows the fair value of financial assets and liabilities measured at amortised cost. 31 December 2021 31 December 2020 Carrying Fair Carrying Fair Level value value value value Assets Cash and cash equivalents 2 1,937 1,937 2,241 2,241 Financial Investments held to maturity 1 4,351 6,497 4,416 7,101 Loans 2 14,492 15,452 13,398 14,936 Reinsurance and other receivables 2 2,149 2,146 1,961 1,961 Total financial assets 22,929 26,032 22,016 26,239 Liabilities Subordinated liabilities 2 2,748 2,757 2,758 2,847 Borrowings, excluding lease liabilities 2 3,056 3,056 3,350 3,363 Total financial liabilities 5,804 5,813 6,108 6,210 The fair value (FV) calculation of financial instruments not actively traded on financial markets can be summarised as follows. Instrument Type Ageas Products Fair Value Calculation Instruments with no stated maturity Current accounts, saving accounts Nominal value. Instruments without optional features Straight loans, deposits etc. Discounted cash flow methodology; discounting yield curve is the swap curve plus spread (assets) or the swap curve minus spread (liabilities); spread is based on commercial margin computed based on the average of new production during last three months. Instruments with optional features Mortgage loans and other instruments with option features Product is split and linear (non-optional) component is valued using a discounted cash flow methodology and option component valued based on option pricing model. Subordinated bonds or receivables Subordinated assets Valuation is based on broker quotes in an in-active market (level 3). Private equity Private equity and non- quoted participations investments In general based on the European Venture Capital Association's valuation guidelines, using enterprise value/EBITDA, price/cash flow and price/earnings etc. Preference shares (non-quoted) Preference shares If the share is characterised as a debt instrument, a discounted cash flow model is used. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 29 Fair value of financial assets and financial liabilities NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 232 Ageas Annual Report 2021 Commitments 232 | 240 Commitments received and given are detailed as follows. Commitments 31 December 2021 31 December 2020 Commitment Received Credit lines 1,071 1,114 Collateral and guarantees received 4,182 4,435 Other off-balance sheet rights 207 38 Total received 5,460 5,587 Commitment Given Guarantees, Financial and Performance Letters of Credit 199 292 Available credit lines 1,024 982 Collateral and guarantees given 2,184 2,459 Entrusted assets and receivables 738 1,006 Capital rights & commitments 292 189 Real Estate commitments 531 419 Other off-balance sheet commitments 1,297 961 Total given 6,265 6,308 The collateral and guarantees received relate mainly to residential mortgages and to a lesser extent on policyholder loans and commercial loans. Other off-balance sheet commitments as at 31 December 2021 include EUR 521 million in outstanding credit bids (31 December 2020: EUR 185 million). Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 28 Commitments 233 | 240 The following table shows the fair value of financial assets and liabilities measured at amortised cost. 31 December 2021 31 December 2020 Carrying Fair Carrying Fair Level value value value value Assets Cash and cash equivalents 2 1,937 1,937 2,241 2,241 Financial Investments held to maturity 1 4,351 6,497 4,416 7,101 Loans 2 14,492 15,452 13,398 14,936 Reinsurance and other receivables 2 2,149 2,146 1,961 1,961 Total financial assets 22,929 26,032 22,016 26,239 Liabilities Subordinated liabilities 2 2,748 2,757 2,758 2,847 Borrowings, excluding lease liabilities 2 3,056 3,056 3,350 3,363 Total financial liabilities 5,804 5,813 6,108 6,210 The fair value (FV) calculation of financial instruments not actively traded on financial markets can be summarised as follows. Instrument Type Ageas Products Fair Value Calculation Instruments with no stated maturity Current accounts, saving accounts Nominal value. Instruments without optional features Straight loans, deposits etc. Discounted cash flow methodology; discounting yield curve is the swap curve plus spread (assets) or the swap curve minus spread (liabilities); spread is based on commercial margin computed based on the average of new production during last three months. Instruments with optional features Mortgage loans and other instruments with option features Product is split and linear (non-optional) component is valued using a discounted cash flow methodology and option component valued based on option pricing model. Subordinated bonds or receivables Subordinated assets Valuation is based on broker quotes in an in-active market (level 3). Private equity Private equity and non- quoted participations investments In general based on the European Venture Capital Association's valuation guidelines, using enterprise value/EBITDA, price/cash flow and price/earnings etc. Preference shares (non-quoted) Preference shares If the share is characterised as a debt instrument, a discounted cash flow model is used. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 29 Fair value of financial assets and financial liabilities 233 Ageas Annual Report 2021 Fair value of ﬁnancial assets and ﬁnancial liabilities 234 | 240 Ageas pursues a policy aimed at quantifying and monitoring pricing uncertainties related to the calculation of fair values using valuation techniques and internal models. Related uncertainties are a feature of the ‘model risk’ concept. Model risk arises when the product pricing requires valuation techniques which are not yet standardised or for which input data cannot be directly observed in the market, leading to assumptions about the input data themselves. The introduction of new, sophisticated products in the market has resulted in the development of mathematical models to price them. These models in turn depend on assumptions regarding the stochastic behaviour of underlying variables, numerical algorithms and other possible approximations needed to replicate the complexity of the financial instruments. Furthermore, the underlying hypotheses of a model depend on the general market conditions (e.g. specific interest rates, volatilities) prevailing at the time the model is developed. There is no guarantee that the model will continue to yield adequate results should market conditions change drastically. Any related model uncertainty is quantified as accurately as possible and is the basis for adjusting the fair value calculated by the valuation techniques and internal models. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 234 Ageas Annual Report 2021 234 | 240 Ageas pursues a policy aimed at quantifying and monitoring pricing uncertainties related to the calculation of fair values using valuation techniques and internal models. Related uncertainties are a feature of the ‘model risk’ concept. Model risk arises when the product pricing requires valuation techniques which are not yet standardised or for which input data cannot be directly observed in the market, leading to assumptions about the input data themselves. The introduction of new, sophisticated products in the market has resulted in the development of mathematical models to price them. These models in turn depend on assumptions regarding the stochastic behaviour of underlying variables, numerical algorithms and other possible approximations needed to replicate the complexity of the financial instruments. Furthermore, the underlying hypotheses of a model depend on the general market conditions (e.g. specific interest rates, volatilities) prevailing at the time the model is developed. There is no guarantee that the model will continue to yield adequate results should market conditions change drastically. Any related model uncertainty is quantified as accurately as possible and is the basis for adjusting the fair value calculated by the valuation techniques and internal models. 235 Ageas Annual Report 2021 E Notes to the Consolidated Income Statement 236 | 240 Gross inflow Life consists of premiums received by insurance companies for issued insurance and investment contracts. Premium inflow of insurance contracts and investment contracts with DPF is recognised in the income statement. Premium inflow of investment contracts without DPF, mainly unit-linked contracts, is (after deduction of fees) directly recognised as liabilities (deposit accounting). Fees are recognised as fee income in the income statement. 2021 2020 Gross inflow Life 6,218 5,197 Gross inflow Non-life 4,589 4,298 General account and eliminations (2) (3) Total gross inflow 10,805 9,492 2021 2020 Net earned premiums Life 4,364 4,111 Net earned premiums Non-life 4,171 3,893 General account and eliminations (2) (2) Total net earned premiums 8,533 8,002 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 30 Insurance premiums 237 | 240 Life 2021 2020 Unit-linked insurance contracts Single written premiums 236 178 Periodic written premiums 250 115 Total unit-linked insurance contracts 486 293 Non unit-linked insurance contracts Single written premiums 354 338 Periodic written premiums 872 969 Group business total 1,226 1,307 Single written premiums 322 321 Periodic written premiums 431 421 Individual business total 753 742 Total non unit-linked insurance contracts 1,979 2,049 Investment contracts with DPF Single written premiums 1,427 1,278 Periodic written premiums 500 521 Total investment contracts with DPF 1,927 1,799 Gross premium income Life 4,392 4,140 Single written premiums 1,752 1,012 Periodic written premiums 74 45 Premium inflow deposit accounting 1,826 1,057 Gross inflow Life 6,218 5,197 2021 2020 Gross premiums Life 4,392 4,140 Ceded reinsurance premiums (28) (29) Net earned premiums Life 4,364 4,111 Non-life Property & Casualty includes premiums received for motor, fire and other damage to property. Accident & Property & 2021 Health Casualty Total Gross written premiums 1,093 3,496 4,589 Change in unearned premiums, gross 14 14 Gross earned premiums 1,093 3,510 4,603 Ceded reinsurance premiums (50) (383) (433) Reinsurers' share of unearned premiums (2) 3 1 Net earned premiums Non-life 1,041 3,130 4,171 Accident & Property & 2020 Health Casualty Total Gross written premiums 969 3,329 4,298 Change in unearned premiums, gross 6 (29) (23) Gross earned premiums 975 3,300 4,275 Ceded reinsurance premiums (42) (339) (381) Reinsurers' share of unearned premiums (2) 1 (1) Net earned premiums Non-life 931 2,962 3,893 NOTES TO THE CONSOLIDATED INCOME STATEMENT 236 Ageas Annual Report 2021 Insurance premiums 236 | 240 Gross inflow Life consists of premiums received by insurance companies for issued insurance and investment contracts. Premium inflow of insurance contracts and investment contracts with DPF is recognised in the income statement. Premium inflow of investment contracts without DPF, mainly unit-linked contracts, is (after deduction of fees) directly recognised as liabilities (deposit accounting). Fees are recognised as fee income in the income statement. 2021 2020 Gross inflow Life 6,218 5,197 Gross inflow Non-life 4,589 4,298 General account and eliminations (2) (3) Total gross inflow 10,805 9,492 2021 2020 Net earned premiums Life 4,364 4,111 Net earned premiums Non-life 4,171 3,893 General account and eliminations (2) (2) Total net earned premiums 8,533 8,002 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 30 Insurance premiums 237 | 240 Life 2021 2020 Unit-linked insurance contracts Single written premiums 236 178 Periodic written premiums 250 115 Total unit-linked insurance contracts 486 293 Non unit-linked insurance contracts Single written premiums 354 338 Periodic written premiums 872 969 Group business total 1,226 1,307 Single written premiums 322 321 Periodic written premiums 431 421 Individual business total 753 742 Total non unit-linked insurance contracts 1,979 2,049 Investment contracts with DPF Single written premiums 1,427 1,278 Periodic written premiums 500 521 Total investment contracts with DPF 1,927 1,799 Gross premium income Life 4,392 4,140 Single written premiums 1,752 1,012 Periodic written premiums 74 45 Premium inflow deposit accounting 1,826 1,057 Gross inflow Life 6,218 5,197 2021 2020 Gross premiums Life 4,392 4,140 Ceded reinsurance premiums (28) (29) Net earned premiums Life 4,364 4,111 Non-life Property & Casualty includes premiums received for motor, fire and other damage to property. Accident & Property & 2021 Health Casualty Total Gross written premiums 1,093 3,496 4,589 Change in unearned premiums, gross 14 14 Gross earned premiums 1,093 3,510 4,603 Ceded reinsurance premiums (50) (383) (433) Reinsurers' share of unearned premiums (2) 3 1 Net earned premiums Non-life 1,041 3,130 4,171 Accident & Property & 2020 Health Casualty Total Gross written premiums 969 3,329 4,298 Change in unearned premiums, gross 6 (29) (23) Gross earned premiums 975 3,300 4,275 Ceded reinsurance premiums (42) (339) (381) Reinsurers' share of unearned premiums (2) 1 (1) Net earned premiums Non-life 931 2,962 3,893 237 Ageas Annual Report 2021 238 | 240 Below is a breakdown of the Non-life net earned premiums by insurance operating segment. Accident & Property & 2021 Health Casualty Total Belgium 548 953 1,501 UK 6 785 791 Continental Europe 245 203 448 Reinsurance 242 1,193 1,435 Elimination (4) (4) Net earned premiums Non-life 1,041 3,130 4,171 Accident & Property & 2020 Health Casualty Total Belgium 473 904 1,377 UK 15 597 612 Continental Europe 219 158 377 Reinsurance 224 1,302 1,526 Elimination 1 1 Net earned premiums Non-life 931 2,962 3,893 239 | 240 2021 2020 Interest income Interest income on cash & cash equivalents 2 3 Interest income on loans to banks 25 19 Interest income on investments 1,355 1,446 Interest income on loans to customers 292 259 Interest income on derivatives held for trading and other 9 3 Total interest income 1,683 1,730 Dividend income from equity securities 161 128 Rental income from investment property 211 206 Rental income from parking garage 346 302 Other investment income 26 26 Total interest, dividend and other investment income 2,427 2,392 Rental income from car parks in 2021 and 2020 has been adversely impacted by the Covid-19 pandemic, especially for airport and city centre car parks. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 31 Interest, dividend and other investment income NOTES TO THE CONSOLIDATED INCOME STATEMENT 238 Ageas Annual Report 2021 238 | 240 Below is a breakdown of the Non-life net earned premiums by insurance operating segment. Accident & Property & 2021 Health Casualty Total Belgium 548 953 1,501 UK 6 785 791 Continental Europe 245 203 448 Reinsurance 242 1,193 1,435 Elimination (4) (4) Net earned premiums Non-life 1,041 3,130 4,171 Accident & Property & 2020 Health Casualty Total Belgium 473 904 1,377 UK 15 597 612 Continental Europe 219 158 377 Reinsurance 224 1,302 1,526 Elimination 1 1 Net earned premiums Non-life 931 2,962 3,893 239 | 240 2021 2020 Interest income Interest income on cash & cash equivalents 2 3 Interest income on loans to banks 25 19 Interest income on investments 1,355 1,446 Interest income on loans to customers 292 259 Interest income on derivatives held for trading and other 9 3 Total interest income 1,683 1,730 Dividend income from equity securities 161 128 Rental income from investment property 211 206 Rental income from parking garage 346 302 Other investment income 26 26 Total interest, dividend and other investment income 2,427 2,392 Rental income from car parks in 2021 and 2020 has been adversely impacted by the Covid-19 pandemic, especially for airport and city centre car parks. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 31 Interest, dividend and other investment income 239 Ageas Annual Report 2021 Interest, dividend and other investment income 240 | 240 2021 2020 Debt securities classified as available for sale 17 50 Equity securities classified as available for sale 120 24 Financial instruments held for trading 9 1 Investment property 115 157 Capital gain (losses) on sale of shares of subsidiaries 1 26 Equity accounted investments 23 40 Property, plant and equipment 8 (1) Assets and liabilities held at fair value through profit or loss 10 (3) Hedging results (5) (14) Other (4) 359 Total Result on sales and revaluations 294 639 In 2021, equity markets recovered from the decline caused by the covid-19 pandemic in 2020 and higher realised gains were achieved in 2021. The line ‘Other’ in 2020 is mainly linked to the tender operation on the FRESH securities in the first quarter, followed by the repurchase of an additional number of FRESH securities in the second quarter. The two transactions generated a gain of EUR 332 million, net of the result on the associated interest rate swap. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 32 Result on sales and revaluations 241 | 240 2021 2020 (Un)realised gains (losses) - insurance contracts 268 55 (Un)realised gains (losses) - investment contracts 964 453 (Un)realised gains (losses) 1,232 508 Investment income - insurance contracts 15 8 Investment income - investment contracts 159 (32) Realised investment income 174 (24) Total investment income related to unit-linked contracts 1,406 484 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 33 Investment income related to unit- linked contracts NOTES TO THE CONSOLIDATED INCOME STATEMENT 240 Ageas Annual Report 2021 Result on sales and revaluations 240 | 240 2021 2020 Debt securities classified as available for sale 17 50 Equity securities classified as available for sale 120 24 Financial instruments held for trading 9 1 Investment property 115 157 Capital gain (losses) on sale of shares of subsidiaries 1 26 Equity accounted investments 23 40 Property, plant and equipment 8 (1) Assets and liabilities held at fair value through profit or loss 10 (3) Hedging results (5) (14) Other (4) 359 Total Result on sales and revaluations 294 639 In 2021, equity markets recovered from the decline caused by the covid-19 pandemic in 2020 and higher realised gains were achieved in 2021. The line ‘Other’ in 2020 is mainly linked to the tender operation on the FRESH securities in the first quarter, followed by the repurchase of an additional number of FRESH securities in the second quarter. The two transactions generated a gain of EUR 332 million, net of the result on the associated interest rate swap. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 32 Result on sales and revaluations 241 | 240 2021 2020 (Un)realised gains (losses) - insurance contracts 268 55 (Un)realised gains (losses) - investment contracts 964 453 (Un)realised gains (losses) 1,232 508 Investment income - insurance contracts 15 8 Investment income - investment contracts 159 (32) Realised investment income 174 (24) Total investment income related to unit-linked contracts 1,406 484 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 33 Investment income related to unit- linked contracts 241 Ageas Annual Report 2021 Investment income related to unit-linked contracts 242 | 240 2021 2020 Reinsurance commissions 107 98 Insurance and investment fees 245 168 Asset management 32 28 Guarantees and commitment fees 1 1 Other service fees 82 90 Total fee and commission income 467 385 The line item ‘Other service fees’ mainly relates to fees received by Ageas brokerage companies for the sale of insurance policies to third parties. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 34 Fee and commission income 243 | 240 2021 2020 Proceeds of sale of property intended for sale 128 60 Recovery of staff and other expenses from third parties 27 26 Other 127 115 Total other income 282 201 Other income includes the sales of buildings held for resale related to AGRE real estate development projects for an amount of EUR 128.3 million (EUR 60.4 million last year), the re- invoicing of service costs related to rental activities, the turnover of the service companies and the recovery of staff and other expenses from third parties. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 35 Other income NOTES TO THE CONSOLIDATED INCOME STATEMENT 242 Ageas Annual Report 2021 Fee and commission income 242 | 240 2021 2020 Reinsurance commissions 107 98 Insurance and investment fees 245 168 Asset management 32 28 Guarantees and commitment fees 1 1 Other service fees 82 90 Total fee and commission income 467 385 The line item ‘Other service fees’ mainly relates to fees received by Ageas brokerage companies for the sale of insurance policies to third parties. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 34 Fee and commission income 243 | 240 2021 2020 Proceeds of sale of property intended for sale 128 60 Recovery of staff and other expenses from third parties 27 26 Other 127 115 Total other income 282 201 Other income includes the sales of buildings held for resale related to AGRE real estate development projects for an amount of EUR 128.3 million (EUR 60.4 million last year), the re- invoicing of service costs related to rental activities, the turnover of the service companies and the recovery of staff and other expenses from third parties. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 35 Other income 243 Ageas Annual Report 2021 Other income 244 | 240 2021 2020 Life insurance 4,897 4,623 Non-life insurance 2,578 2,194 General account and eliminations (4) (2) Total insurance claims and benefits, net 7,471 6,815 2021 2020 Benefits and surrenders, gross 4,805 5,098 Change in liabilities arising from insurance and investment contracts, gross 109 (453) Total Life insurance claims and benefits, gross 4,914 4,645 Reinsurers' share of claims and benefits (17) (22) Total Life insurance claims and benefits, net 4,897 4,623 2021 2020 Claims paid, gross 2,547 2,411 Change in liabilities arising from insurance contracts, gross 300 (79) Total Non-life insurance claims and benefits, gross 2,847 2,332 Reinsurers' share of claims paid (193) (157) Reinsurers' share of change in liabilities (76) 19 Total Non-life insurance claims and benefits, net 2,578 2,194 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 36 Insurance claims and benefits 245 | 240 2021 2020 Subordinated liabilities 85 78 Lease liability 17 16 Borrowings from banks 19 17 Derivatives 5 7 Other 12 21 Total financing costs 138 139 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 37 Financing costs NOTES TO THE CONSOLIDATED INCOME STATEMENT 24 4 Ageas Annual Report 2021 Insurance claims and beneﬁts 244 | 240 2021 2020 Life insurance 4,897 4,623 Non-life insurance 2,578 2,194 General account and eliminations (4) (2) Total insurance claims and benefits, net 7,471 6,815 2021 2020 Benefits and surrenders, gross 4,805 5,098 Change in liabilities arising from insurance and investment contracts, gross 109 (453) Total Life insurance claims and benefits, gross 4,914 4,645 Reinsurers' share of claims and benefits (17) (22) Total Life insurance claims and benefits, net 4,897 4,623 2021 2020 Claims paid, gross 2,547 2,411 Change in liabilities arising from insurance contracts, gross 300 (79) Total Non-life insurance claims and benefits, gross 2,847 2,332 Reinsurers' share of claims paid (193) (157) Reinsurers' share of change in liabilities (76) 19 Total Non-life insurance claims and benefits, net 2,578 2,194 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 36 Insurance claims and benefits 245 | 240 2021 2020 Subordinated liabilities 85 78 Lease liability 17 16 Borrowings from banks 19 17 Derivatives 5 7 Other 12 21 Total financing costs 138 139 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 37 Financing costs 245 Ageas Annual Report 2021 Financing costs 246 | 240 2021 2020 Investments in equity securities and other 34 152 Investments in debt securities 2 Investment property 1 Loans 2 Reinsurance and other receivables 3 15 Property, plant and equipment Goodwill and other intangible assets 2 Accrued interest and other assets 2 Total change in impairments 41 172 The level of impairments on equity securities in 2020 reflects the adverse equity market movements induced by the Covid-19 pandemic, especially in the first and second quarter of the year. The increase in impairments in 2020 on reinsurance and other receivables relates to Covid-19 related rent concessions that Ageas gave as lessor for the lease of retail property and office buildings. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 38 Change in impairments 247 | 240 2021 2020 Securities 4 6 Intermediaries 1,154 1,084 Asset management fees 6 6 Custodian fees 6 6 Other fee and commission expenses 43 36 Total fee and commission expenses 1,213 1,138 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 39 Fee and commission expenses NOTES TO THE CONSOLIDATED INCOME STATEMENT 246 Ageas Annual Report 2021 Change in impairments 246 | 240 2021 2020 Investments in equity securities and other 34 152 Investments in debt securities 2 Investment property 1 Loans 2 Reinsurance and other receivables 3 15 Property, plant and equipment Goodwill and other intangible assets 2 Accrued interest and other assets 2 Total change in impairments 41 172 The level of impairments on equity securities in 2020 reflects the adverse equity market movements induced by the Covid-19 pandemic, especially in the first and second quarter of the year. The increase in impairments in 2020 on reinsurance and other receivables relates to Covid-19 related rent concessions that Ageas gave as lessor for the lease of retail property and office buildings. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 38 Change in impairments 247 | 240 2021 2020 Securities 4 6 Intermediaries 1,154 1,084 Asset management fees 6 6 Custodian fees 6 6 Other fee and commission expenses 43 36 Total fee and commission expenses 1,213 1,138 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 39 Fee and commission expenses 247 Ageas Annual Report 2021 Fee and commission expenses 248 | 240 2021 2020 Salaries and wages 590 583 Social security charges 129 126 Pension expenses relating to defined benefit pension plans 57 54 Defined contribution plan expenses 11 11 Share-based compensation 7 3 Other 58 57 Total staff expenses 852 834 The line item ‘Other’ includes mainly other short-term employee benefits. Note 6 section 6.1 Employee benefits contains further details of post-employment benefits and other long-term employee benefits, including pension costs related to defined benefit plans and defined contribution plans. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 40 Staff expenses 249 | 240 2021 2020 Depreciation on tangible assets Buildings held for own use and car parks 103 103 Leasehold improvements 5 5 Investment property 97 94 Equipment 32 34 Amortisation of intangible assets Purchased software 7 7 Internally developed software 4 3 Value of business acquired (VOBA) 11 13 Other intangible assets 30 28 Other Other rental expenses and related expenses 18 18 Variable Lease Payments 51 48 Operating and other direct expenses relating to investment property 51 51 Operating and other direct expenses relating to property for own use 53 57 Professional fees 121 126 Capitalised deferred acquisition costs (416) (418) Depreciation deferred acquisition costs 418 423 Marketing and public relations costs 62 60 Information technology costs 197 174 Maintenance and repair expenses 19 23 Cost of sale of property intended for sale 116 53 Other 290 263 Total other expenses 1,269 1,165 Ageas’s car park operator has arrangements whereby a variable lease is paid for car parks. Variable lease expense reflects lower turnover in these car parks in both 2021 and 2020 as a result of the Covid-19 pandemic. The line item ‘Operating and other direct expenses relating to investment property’ is partly offset by income accounts as reported in note 35 Other Income. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 41 Other expenses NOTES TO THE CONSOLIDATED INCOME STATEMENT 248 Ageas Annual Report 2021 Sta expenses 248 | 240 2021 2020 Salaries and wages 590 583 Social security charges 129 126 Pension expenses relating to defined benefit pension plans 57 54 Defined contribution plan expenses 11 11 Share-based compensation 7 3 Other 58 57 Total staff expenses 852 834 The line item ‘Other’ includes mainly other short-term employee benefits. Note 6 section 6.1 Employee benefits contains further details of post-employment benefits and other long-term employee benefits, including pension costs related to defined benefit plans and defined contribution plans. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 40 Staff expenses 249 | 240 2021 2020 Depreciation on tangible assets Buildings held for own use and car parks 103 103 Leasehold improvements 5 5 Investment property 97 94 Equipment 32 34 Amortisation of intangible assets Purchased software 7 7 Internally developed software 4 3 Value of business acquired (VOBA) 11 13 Other intangible assets 30 28 Other Other rental expenses and related expenses 18 18 Variable Lease Payments 51 48 Operating and other direct expenses relating to investment property 51 51 Operating and other direct expenses relating to property for own use 53 57 Professional fees 121 126 Capitalised deferred acquisition costs (416) (418) Depreciation deferred acquisition costs 418 423 Marketing and public relations costs 62 60 Information technology costs 197 174 Maintenance and repair expenses 19 23 Cost of sale of property intended for sale 116 53 Other 290 263 Total other expenses 1,269 1,165 Ageas’s car park operator has arrangements whereby a variable lease is paid for car parks. Variable lease expense reflects lower turnover in these car parks in both 2021 and 2020 as a result of the Covid-19 pandemic. The line item ‘Operating and other direct expenses relating to investment property’ is partly offset by income accounts as reported in note 35 Other Income. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 41 Other expenses 249 Ageas Annual Report 2021 Other expenses 250 | 240 41.1 Audit fees For 2021 and 2020, these fees can be broken down into the following components:  audit fees, which include fees for auditing the statutory, consolidated financial statements and the review of the interim financial statements;  audit-related fees, which include fees for work performed on prospectuses, non-standard auditing and advisory services not related to statutory auditing;  fees for tax advice;  other non-audit fees, which include fees for support and advice. 2021 2020 Ageas Other Ageas Other Statutory Ageas Statutory Ageas Auditors Auditors Auditors Auditors Audit fees 4 2 4 1 Audit-related fees 1 1 Tax fees Other non-audit fees Total 5 2 5 1 251 | 240 2021 2020 Current tax expenses for the current period 235 255 Adjustments recognised in the period for current tax of prior periods (4) (16) Total current tax expenses 231 239 Deferred tax arising from the current period (5) (15) Impact of changes in tax rates on deferred taxes (11) (5) Deferred tax arising from the write-down or (reversal) of a deferred tax asset Previously unrecognised tax losses, tax credits and temporary differences reducing deferred tax expense 14 Total deferred tax expenses (income) (16) (6) Total income tax expenses (income) 215 233 Below is a reconciliation from expected to actual income tax expense. Given the financial reporting consolidation at the Belgian top holding company ageas SA/NV, the Group tax rate is determined at the prevailing corporate income tax rate in Belgium. Deviations between expected and actual income tax expense in the various jurisdictions in which the Ageas Group operates resulting from local tax laws and regulations, are stated at local tax rates applicable in such jurisdictions and can be broken down into the categories depicted below. 2021 2020 Result before taxation 1,231 1,533 Applicable group tax rate 25.00% 25.00% Expected income tax expense 308 383 Increase (decrease) against local tax rates resulting from: Tax exempt income (including dividend and capital gains) (29) (73) Share in net result of associates and joint ventures (111) (81) Disallowed items 21 16 Previously unrecognised tax losses and temporary differences (80) Write-down and reversal of write-down of deferred tax assets, including current year tax-losses deemed non-recoverable 33 23 Impact of changes in tax rates on temporary differences (11) (5) Foreign tax rate differential Adjustments for current and deferred tax of previous years (4) (17) Deferred tax on investments in subsidiaries, associates and joint ventures 19 24 Local income taxes (state/city/cantonal/communal taxes) Other (11) 43 Actual income tax expenses (income) 215 233 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 42 Income tax expenses NOTES TO THE CONSOLIDATED INCOME STATEMENT 250 Ageas Annual Report 2021 250 | 240 41.1 Audit fees For 2021 and 2020, these fees can be broken down into the following components:  audit fees, which include fees for auditing the statutory, consolidated financial statements and the review of the interim financial statements;  audit-related fees, which include fees for work performed on prospectuses, non-standard auditing and advisory services not related to statutory auditing;  fees for tax advice;  other non-audit fees, which include fees for support and advice. 2021 2020 Ageas Other Ageas Other Statutory Ageas Statutory Ageas Auditors Auditors Auditors Auditors Audit fees 4 2 4 1 Audit-related fees 1 1 Tax fees Other non-audit fees Total 5 2 5 1 251 | 240 2021 2020 Current tax expenses for the current period 235 255 Adjustments recognised in the period for current tax of prior periods (4) (16) Total current tax expenses 231 239 Deferred tax arising from the current period (5) (15) Impact of changes in tax rates on deferred taxes (11) (5) Deferred tax arising from the write-down or (reversal) of a deferred tax asset Previously unrecognised tax losses, tax credits and temporary differences reducing deferred tax expense 14 Total deferred tax expenses (income) (16) (6) Total income tax expenses (income) 215 233 Below is a reconciliation from expected to actual income tax expense. Given the financial reporting consolidation at the Belgian top holding company ageas SA/NV, the Group tax rate is determined at the prevailing corporate income tax rate in Belgium. Deviations between expected and actual income tax expense in the various jurisdictions in which the Ageas Group operates resulting from local tax laws and regulations, are stated at local tax rates applicable in such jurisdictions and can be broken down into the categories depicted below. 2021 2020 Result before taxation 1,231 1,533 Applicable group tax rate 25.00% 25.00% Expected income tax expense 308 383 Increase (decrease) against local tax rates resulting from: Tax exempt income (including dividend and capital gains) (29) (73) Share in net result of associates and joint ventures (111) (81) Disallowed items 21 16 Previously unrecognised tax losses and temporary differences (80) Write-down and reversal of write-down of deferred tax assets, including current year tax-losses deemed non-recoverable 33 23 Impact of changes in tax rates on temporary differences (11) (5) Foreign tax rate differential Adjustments for current and deferred tax of previous years (4) (17) Deferred tax on investments in subsidiaries, associates and joint ventures 19 24 Local income taxes (state/city/cantonal/communal taxes) Other (11) 43 Actual income tax expenses (income) 215 233 Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 42 Income tax expenses 251 Ageas Annual Report 2021 Income tax expenses 253 | 240 43.1 Contingent liabilities related to legal proceedings Like any other financial group, Ageas group is involved as a defendant in various claims, disputes and legal proceedings arising in the ordinary course of its business. In addition, as a result of the events and developments surrounding the former Fortis group between May 2007 and October 2008 (e.g. the acquisition of parts of ABN AMRO and the capital increase in September/October 2007, the announcement of the solvency plan in June 2008, the divestment of banking activities and Dutch insurance activities in September/October 2008), Ageas has become involved in legal proceedings. On 14 March 2016 Ageas entered into a settlement agreement with several claimant organisations that represent a series of shareholders in collective claims before the Belgian and Dutch courts. On 23 May 2016 the parties to the settlement, i.e. Ageas, Deminor, Stichting FortisEffect, Stichting Investor Claims Against Fortis, VEB and Stichting FORsettlement requested the Amsterdam Court of Appeal to declare the settlement binding for all eligible Fortis shareholders who will not opt out before the expiry of a given period, in accordance with the Dutch Act on Collective Settlement of Mass Claims (Wet Collectieve Afwikkeling Massaschade). Ageas also reached an agreement with Mr Arnauts and Mr Lenssens, two attorneys who launched legal action against Ageas on behalf of a number of claimants, and in 2017 with the Luxembourg based company Archand s.à.r.l. and affiliated persons, to support the settlement. On 16 June 2017, the court took the interim decision not to declare the settlement binding in its initial format. As per 16 October 2017, Ageas decided to make a final additional effort of EUR 100 million. Per 12 December 2017, the parties submitted an amended and restated settlement agreement to the court. Consumentenclaim, an opponent of the settlement in its initial 2016 format, agreed to support the 2017 settlement. On 13 July 2018 the Amsterdam Appeal Court declared the settlement binding on Eligible Shareholders (i.e. persons who held Fortis shares at any time between close of business on 28 February 2007 and close of business on 14 October 2008). Ageas waived its termination right on 21 December 2018, effectively making the settlement final. This means that Eligible Shareholders are entitled to compensation for the events of 2007-2008, subject to a full release of liability with respect to these events, and in accordance with the (other) terms of the settlement agreement. It further means that Eligible Shareholders who did not timely opt out (i.e. at the latest on 31 December 2018), regardless of whether or not they timely file a claim form, are, by operation of law, deemed to have granted such release of liability and to have waived any rights in connection with the events. The claims filing period started on 27 July 2018 and ended on 28 July 2019. As at 31 December 2021, an amount of EUR 1,199 million had already been paid out to Eligible Shareholders and a remaining provision of EUR 114 million had been recognised for the settlement (see note 25 Provisions). Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 43 Contingent liabilities NOTES TO ITEMS NOT RECORDED IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 252 Ageas Annual Report 2021 F Notes to items not recorded in the consolidated statement of ﬁnancial position 253 | 240 43.1 Contingent liabilities related to legal proceedings Like any other financial group, Ageas group is involved as a defendant in various claims, disputes and legal proceedings arising in the ordinary course of its business. In addition, as a result of the events and developments surrounding the former Fortis group between May 2007 and October 2008 (e.g. the acquisition of parts of ABN AMRO and the capital increase in September/October 2007, the announcement of the solvency plan in June 2008, the divestment of banking activities and Dutch insurance activities in September/October 2008), Ageas has become involved in legal proceedings. On 14 March 2016 Ageas entered into a settlement agreement with several claimant organisations that represent a series of shareholders in collective claims before the Belgian and Dutch courts. On 23 May 2016 the parties to the settlement, i.e. Ageas, Deminor, Stichting FortisEffect, Stichting Investor Claims Against Fortis, VEB and Stichting FORsettlement requested the Amsterdam Court of Appeal to declare the settlement binding for all eligible Fortis shareholders who will not opt out before the expiry of a given period, in accordance with the Dutch Act on Collective Settlement of Mass Claims (Wet Collectieve Afwikkeling Massaschade). Ageas also reached an agreement with Mr Arnauts and Mr Lenssens, two attorneys who launched legal action against Ageas on behalf of a number of claimants, and in 2017 with the Luxembourg based company Archand s.à.r.l. and affiliated persons, to support the settlement. On 16 June 2017, the court took the interim decision not to declare the settlement binding in its initial format. As per 16 October 2017, Ageas decided to make a final additional effort of EUR 100 million. Per 12 December 2017, the parties submitted an amended and restated settlement agreement to the court. Consumentenclaim, an opponent of the settlement in its initial 2016 format, agreed to support the 2017 settlement. On 13 July 2018 the Amsterdam Appeal Court declared the settlement binding on Eligible Shareholders (i.e. persons who held Fortis shares at any time between close of business on 28 February 2007 and close of business on 14 October 2008). Ageas waived its termination right on 21 December 2018, effectively making the settlement final. This means that Eligible Shareholders are entitled to compensation for the events of 2007-2008, subject to a full release of liability with respect to these events, and in accordance with the (other) terms of the settlement agreement. It further means that Eligible Shareholders who did not timely opt out (i.e. at the latest on 31 December 2018), regardless of whether or not they timely file a claim form, are, by operation of law, deemed to have granted such release of liability and to have waived any rights in connection with the events. The claims filing period started on 27 July 2018 and ended on 28 July 2019. As at 31 December 2021, an amount of EUR 1,199 million had already been paid out to Eligible Shareholders and a remaining provision of EUR 114 million had been recognised for the settlement (see note 25 Provisions). Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 43 Contingent liabilities 253 Ageas Annual Report 2021 F Notes to items not recorded in the consolidated statement of ﬁnancial position Contingent liabilities 254 | 240 Now that the settlement has become final, the parties who supported the settlement committed to terminate their legal proceedings. The parties who timely submitted an opt-out notice may resume their legal proceedings in the Netherlands or, as the case may be, resume or continue their legal proceedings in Belgium. In the sections below we give a comprehensive update of all residual proceedings which were either terminated in 2021, or not terminated by 31 December 2021. These constitute contingent liabilities without provisions. 1. In the Netherlands 1.1 Cebulon On 14 July 2020, Dutch investment company Cebulon initiated legal proceedings against Ageas and some co-defendants regarding alleged misleading communication in 2007-2008. In its capacity of former Fortis shareholder, Cebulon claims a compensation for the allegedly suffered damages. The forum is the Utrecht court of first instance. An introductory hearing took place on 9 September 2020 in Utrecht. The parties are now exchanging written submissions. 1.2 Dutch individual investor On 29 January 2021, a Dutch individual investor initiated legal proceedings against Ageas. He claims a compensation for the damages he allegedly suffered pursuant to the Fortis crisis in 2007-2008. The forum is the Utrecht court of first instance. An introductory hearing was held on 10 March 2021. The parties are now exchanging written submissions. 2. In Belgium 2.1 Modrikamen On 28 January 2009, a series of shareholders represented by Mr Modrikamen brought an action before the Brussels Commercial Court initially requesting the annulment of the sale of ASR to the Dutch State and the sale of Fortis Bank to SFPI (and subsequently to BNP Paribas), or alternatively damages. On 8 December 2009, the Court inter alia decided that it was not competent to judge on actions against the Dutch defendants. On 17 January 2013, the Brussels Court of Appeal confirmed this judgment in this respect. In July 2014, Mr Modrikamen filed an appeal before the Supreme Court on this issue. On 23 October 2015 the Supreme Court rejected this appeal. Mr Modrikamen continued the proceedings before the commercial court regarding the sale of Fortis Bank, aiming at the payment of a compensation by BNP Paribas to Ageas, as well as by Ageas to the claimants. In an interim judgment of 4 November 2014, the court declared about 50% of the original claimants not admissible. On 29 April 2016 the Brussels Commercial Court decided to suspend the proceedings awaiting the outcome of the criminal procedure. On 7 June 2020, Ageas entered into a settlement agreement with Mr Modrikamen and his clients who timely filed an opt- out notice, pursuant to which these persons no longer continue these proceedings against ageas SA/NV. The proceedings are now reactivated and the parties are exchanging written submissions. Nothing is claimed anymore from Ageas in these proceedings. 2.2 Deminor On 13 January 2010, a series of shareholders associated with Deminor International (currently named DRS Belgium) brought an action before the Brussels Commercial Court, seeking damages based on alleged lack of/or misleading information by Fortis during the period from March 2007 to October 2008. On 28 April 2014, the court declared in an interim judgment about 25% of the claimants not admissible. The parties are in the course of terminating these proceedings; we expect these proceedings to be effectively terminated shortly. 2.3 Other claims on behalf of individual shareholders On 12 September 2012, Patripart, a (former) Fortis shareholder, and its parent company Patrinvest, brought an action before the Brussels Commercial Court, seeking damages based on alleged lack of or misleading information in the context of the 2007 rights issue. On 1 February 2016 the court fully rejected the claim. On 16 March 2016, Patrinvest filed an appeal before the Brussels Appeal Court. The parties have exchanged written submissions and are now awaiting a pleading date and the court’s decision, for which no date has yet been set. On 29 April 2013, a series of shareholders represented by Mr Arnauts brought an action before the Brussels Commercial Court, seeking damages based on alleged incomplete or misleading information by Fortis in 2007 and 2008; this action is suspended awaiting the outcome of the criminal proceedings. The parties are in the course of terminating these proceedings; we expect these proceedings to be effectively terminated shortly. On 19 September 2013, certain (former) Fortis shareholders represented by Mr Lenssens initiated a similar action before the Brussels Civil Court; this action is suspended awaiting the outcome of the criminal proceedings. The parties are in the course of terminating these proceedings; we expect these proceedings to be effectively terminated shortly. 255 | 240 3 Hold harmless undertakings In 2008, Fortis granted certain former executives and directors, at the time of their departure, a contractual hold harmless protection covering legal expenses and, in certain cases, also the financial consequences of any judicial decisions, in the event that legal proceedings were brought against them on the basis of their mandates exercised within the Fortis group. Ageas contests the validity of the contractual hold harmless commitments to the extent they relate to the financial consequences of any judicial decisions. Furthermore, and as standard market practice in this kind of operations, Ageas entered into agreements with certain financial institutions facilitating the placing of Fortis shares in the context of the capital increases of 2007 and 2008. These agreements contain indemnification clauses that imply hold harmless obligations for Ageas subject to certain terms and conditions. Some of these financial institutions are involved in certain legal proceedings mentioned in this chapter. In the context of a settlement with the underwriters of D&O liability insurance and Public Offering of Securities Insurance policies relating to the events and developments surrounding the former Fortis Group in 2007 - 2008, Ageas granted a hold harmless undertaking in favour of the insurers for the aggregate amount of coverage under the policies concerned. In addition, Ageas granted certain indemnity and hold harmless undertakings in favour of certain former Fortis executives and directors and of BNP Paribas Fortis relating to future defence costs, as well as in favour of the directors of the two Dutch foundations created in the context of the settlement. 43.2 Liabilities for hybrid instruments of former subsidiaries In 2007 BNP Paribas Fortis SA/NV issued CASHES (Convertible And Subordinated Hybrid Equity-linked Securities), with ageas SA/NV acting as co-obligor (BNP Paribas Fortis SA/NV was at that point in time a subsidiary). From the original 12,000 securities issued, 3,791 securities remain outstanding, representing a nominal amount of EUR 948 million. The securities have no maturity date and cannot be repaid in cash, they can only be exchanged into Ageas shares at a price of EUR 239.40 per Ageas share. A mandatory exchange takes place if the price of the Ageas share is equal to or higher than EUR 359.10 on twenty consecutive stock exchange business days. BNP Paribas Fortis SA/NV owns 3,958,859 Ageas shares for the purpose of the potential exchange. The sole recourse of the holders of the CASHES against any of the co- obligors with respect to the principal amount are the Ageas shares that BNP Paribas Fortis SA/NV holds, these shares are pledged in favour of such holders. BNP Paribas Fortis SA/NV pays the coupon on the CASHES, in quarterly arrears, at a variable rate of 3 month Euribor plus 200 basis points, up to the exchange of the securities for Ageas shares. In the event that Ageas declares no dividend on its shares, or that the dividends to be declared are below a threshold with respect to any financial year (dividend yield less than 0.5%), and in certain other circumstances, coupons will mandatorily need to be settled by ageas SA/NV via issuance of new shares in accordance with the so called Alternative Coupon Settlement Method (ACSM), while BNP Paribas Fortis SA/NV would need to issue instruments that qualify as hybrid Tier 1 instruments to Ageas as compensation for the coupons paid by ageas SA/NV. If the ACSM is triggered and there is insufficient available authorised capital to enable ageas SA/NV to meet the ACSM obligation, the coupon settlement will be postponed until such time as the ability to issue shares is restored. In an agreement reached in 2012, that amongst others led to the tender and subsequent conversion of CASHES, Ageas agreed to pay an annual indemnity to BNP Paribas Fortis SA/NV that equals the grossed up dividend on the shares that BNP Paribas Fortis SA/NV holds. 43.3 Other contingent liabilities Furthermore, certain individual customers of Ageas France, a fully owned subsidiary of Ageas Insurance International, filed claims against Ageas France in connection with its alleged unilateral modification of the terms and conditions of a unit-linked product by on-charging certain transaction fees. In addition to claiming reimbursement of these fees, plaintiffs also claimed prejudice for lost opportunities for arbitrating between Unit-linked funds and a guaranteed fund using latest known value dates, as well as prohibition for on-charging of the fees. In November 2014, Paris Appeal Court confirmed the first instance decision allowing the claims and appointed experts to determine the scope of indemnification. Following an appeal filed by Ageas France with the French Supreme Court, on 8 September 2016 the French Supreme Court substantially annulled the Paris Appeal Court decision and referred the case to the Versailles Appeal Court. The proceedings before the Versailles Appeal Court have been abandoned. A proceeding in first instance, which had been put on hold for several years, awaiting the decision of the French Supreme Court, has been reactivated by 2 plaintiffs. A hearing was held in the first half of October 2019; parties agreed to settle in December 2021. These proceedings are now terminated. NOTES TO ITEMS NOT RECORDED IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 254 Ageas Annual Report 2021 254 | 240 Now that the settlement has become final, the parties who supported the settlement committed to terminate their legal proceedings. The parties who timely submitted an opt-out notice may resume their legal proceedings in the Netherlands or, as the case may be, resume or continue their legal proceedings in Belgium. In the sections below we give a comprehensive update of all residual proceedings which were either terminated in 2021, or not terminated by 31 December 2021. These constitute contingent liabilities without provisions. 1. In the Netherlands 1.1 Cebulon On 14 July 2020, Dutch investment company Cebulon initiated legal proceedings against Ageas and some co-defendants regarding alleged misleading communication in 2007-2008. In its capacity of former Fortis shareholder, Cebulon claims a compensation for the allegedly suffered damages. The forum is the Utrecht court of first instance. An introductory hearing took place on 9 September 2020 in Utrecht. The parties are now exchanging written submissions. 1.2 Dutch individual investor On 29 January 2021, a Dutch individual investor initiated legal proceedings against Ageas. He claims a compensation for the damages he allegedly suffered pursuant to the Fortis crisis in 2007-2008. The forum is the Utrecht court of first instance. An introductory hearing was held on 10 March 2021. The parties are now exchanging written submissions. 2. In Belgium 2.1 Modrikamen On 28 January 2009, a series of shareholders represented by Mr Modrikamen brought an action before the Brussels Commercial Court initially requesting the annulment of the sale of ASR to the Dutch State and the sale of Fortis Bank to SFPI (and subsequently to BNP Paribas), or alternatively damages. On 8 December 2009, the Court inter alia decided that it was not competent to judge on actions against the Dutch defendants. On 17 January 2013, the Brussels Court of Appeal confirmed this judgment in this respect. In July 2014, Mr Modrikamen filed an appeal before the Supreme Court on this issue. On 23 October 2015 the Supreme Court rejected this appeal. Mr Modrikamen continued the proceedings before the commercial court regarding the sale of Fortis Bank, aiming at the payment of a compensation by BNP Paribas to Ageas, as well as by Ageas to the claimants. In an interim judgment of 4 November 2014, the court declared about 50% of the original claimants not admissible. On 29 April 2016 the Brussels Commercial Court decided to suspend the proceedings awaiting the outcome of the criminal procedure. On 7 June 2020, Ageas entered into a settlement agreement with Mr Modrikamen and his clients who timely filed an opt- out notice, pursuant to which these persons no longer continue these proceedings against ageas SA/NV. The proceedings are now reactivated and the parties are exchanging written submissions. Nothing is claimed anymore from Ageas in these proceedings. 2.2 Deminor On 13 January 2010, a series of shareholders associated with Deminor International (currently named DRS Belgium) brought an action before the Brussels Commercial Court, seeking damages based on alleged lack of/or misleading information by Fortis during the period from March 2007 to October 2008. On 28 April 2014, the court declared in an interim judgment about 25% of the claimants not admissible. The parties are in the course of terminating these proceedings; we expect these proceedings to be effectively terminated shortly. 2.3 Other claims on behalf of individual shareholders On 12 September 2012, Patripart, a (former) Fortis shareholder, and its parent company Patrinvest, brought an action before the Brussels Commercial Court, seeking damages based on alleged lack of or misleading information in the context of the 2007 rights issue. On 1 February 2016 the court fully rejected the claim. On 16 March 2016, Patrinvest filed an appeal before the Brussels Appeal Court. The parties have exchanged written submissions and are now awaiting a pleading date and the court’s decision, for which no date has yet been set. On 29 April 2013, a series of shareholders represented by Mr Arnauts brought an action before the Brussels Commercial Court, seeking damages based on alleged incomplete or misleading information by Fortis in 2007 and 2008; this action is suspended awaiting the outcome of the criminal proceedings. The parties are in the course of terminating these proceedings; we expect these proceedings to be effectively terminated shortly. On 19 September 2013, certain (former) Fortis shareholders represented by Mr Lenssens initiated a similar action before the Brussels Civil Court; this action is suspended awaiting the outcome of the criminal proceedings. The parties are in the course of terminating these proceedings; we expect these proceedings to be effectively terminated shortly. 255 | 240 3 Hold harmless undertakings In 2008, Fortis granted certain former executives and directors, at the time of their departure, a contractual hold harmless protection covering legal expenses and, in certain cases, also the financial consequences of any judicial decisions, in the event that legal proceedings were brought against them on the basis of their mandates exercised within the Fortis group. Ageas contests the validity of the contractual hold harmless commitments to the extent they relate to the financial consequences of any judicial decisions. Furthermore, and as standard market practice in this kind of operations, Ageas entered into agreements with certain financial institutions facilitating the placing of Fortis shares in the context of the capital increases of 2007 and 2008. These agreements contain indemnification clauses that imply hold harmless obligations for Ageas subject to certain terms and conditions. Some of these financial institutions are involved in certain legal proceedings mentioned in this chapter. In the context of a settlement with the underwriters of D&O liability insurance and Public Offering of Securities Insurance policies relating to the events and developments surrounding the former Fortis Group in 2007 - 2008, Ageas granted a hold harmless undertaking in favour of the insurers for the aggregate amount of coverage under the policies concerned. In addition, Ageas granted certain indemnity and hold harmless undertakings in favour of certain former Fortis executives and directors and of BNP Paribas Fortis relating to future defence costs, as well as in favour of the directors of the two Dutch foundations created in the context of the settlement. 43.2 Liabilities for hybrid instruments of former subsidiaries In 2007 BNP Paribas Fortis SA/NV issued CASHES (Convertible And Subordinated Hybrid Equity-linked Securities), with ageas SA/NV acting as co-obligor (BNP Paribas Fortis SA/NV was at that point in time a subsidiary). From the original 12,000 securities issued, 3,791 securities remain outstanding, representing a nominal amount of EUR 948 million. The securities have no maturity date and cannot be repaid in cash, they can only be exchanged into Ageas shares at a price of EUR 239.40 per Ageas share. A mandatory exchange takes place if the price of the Ageas share is equal to or higher than EUR 359.10 on twenty consecutive stock exchange business days. BNP Paribas Fortis SA/NV owns 3,958,859 Ageas shares for the purpose of the potential exchange. The sole recourse of the holders of the CASHES against any of the co- obligors with respect to the principal amount are the Ageas shares that BNP Paribas Fortis SA/NV holds, these shares are pledged in favour of such holders. BNP Paribas Fortis SA/NV pays the coupon on the CASHES, in quarterly arrears, at a variable rate of 3 month Euribor plus 200 basis points, up to the exchange of the securities for Ageas shares. In the event that Ageas declares no dividend on its shares, or that the dividends to be declared are below a threshold with respect to any financial year (dividend yield less than 0.5%), and in certain other circumstances, coupons will mandatorily need to be settled by ageas SA/NV via issuance of new shares in accordance with the so called Alternative Coupon Settlement Method (ACSM), while BNP Paribas Fortis SA/NV would need to issue instruments that qualify as hybrid Tier 1 instruments to Ageas as compensation for the coupons paid by ageas SA/NV. If the ACSM is triggered and there is insufficient available authorised capital to enable ageas SA/NV to meet the ACSM obligation, the coupon settlement will be postponed until such time as the ability to issue shares is restored. In an agreement reached in 2012, that amongst others led to the tender and subsequent conversion of CASHES, Ageas agreed to pay an annual indemnity to BNP Paribas Fortis SA/NV that equals the grossed up dividend on the shares that BNP Paribas Fortis SA/NV holds. 43.3 Other contingent liabilities Furthermore, certain individual customers of Ageas France, a fully owned subsidiary of Ageas Insurance International, filed claims against Ageas France in connection with its alleged unilateral modification of the terms and conditions of a unit-linked product by on-charging certain transaction fees. In addition to claiming reimbursement of these fees, plaintiffs also claimed prejudice for lost opportunities for arbitrating between Unit-linked funds and a guaranteed fund using latest known value dates, as well as prohibition for on-charging of the fees. In November 2014, Paris Appeal Court confirmed the first instance decision allowing the claims and appointed experts to determine the scope of indemnification. Following an appeal filed by Ageas France with the French Supreme Court, on 8 September 2016 the French Supreme Court substantially annulled the Paris Appeal Court decision and referred the case to the Versailles Appeal Court. The proceedings before the Versailles Appeal Court have been abandoned. A proceeding in first instance, which had been put on hold for several years, awaiting the decision of the French Supreme Court, has been reactivated by 2 plaintiffs. A hearing was held in the first half of October 2019; parties agreed to settle in December 2021. These proceedings are now terminated. 255 Ageas Annual Report 2021 256 | 240 On 15 February 2022, Ageas announced that its subsidiary Ageas UK Ltd had concluded an agreement with AXA Insurance UK PLC to sell its Commercial lines front book business. At the level of the Ageas Group the transaction will have an initial positive impact of EUR 45.5 million on the net results, which will be recorded in the first half of 2022. Ageas is carefully monitoring the developing situation in Ukraine and Russia, in particular with regards to indirect macro-economic effects such as the future evolution of interest rates and inflation in markets where we are active. The Group is not active in either country through subsidiaries or affiliates. Foreseeable direct impacts are judged to be immaterial, considering the insignificant direct exposure the Group has to these markets. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 44 Events after the date of the statement of financial position 257 | 240 The Board of Directors of Ageas is responsible for preparing the Ageas Consolidated Financial Statements as at 31 December 2021 in accordance with International Financial Reporting Standards as adopted by the European Union, as well as with the European Transparency Directive (2004/109/EC), and for presenting the Report of the Board of Directors in accordance with the legal and regulatory requirements applicable in Belgium. The Board of Directors has reviewed the Ageas Consolidated Financial Statements and the Report of the Board of Directors on 29 March 2022 and has authorised their issue. The Board of Directors of Ageas declares that, to the best of its knowledge, the Ageas Consolidated Financial Statements give a true and fair view of the assets, liabilities, financial position, and profit or loss of Ageas, and of the uncertainties that Ageas is facing and that the information contained therein has no omissions likely to modify significantly the scope of any statements made. The Board of Directors of Ageas also declares that the Report of the Board of Directors gives a fair overview of the development and performance of the businesses of the Group. The Ageas Annual Report consisting of the Consolidated Financial Statements and Report of the Board of Directors will be submitted to the Annual General Meeting of Shareholders for approval on 18 May 2022. Brussels, 29 March 2022 Board of Directors Chairman Bart De Smet Vice-Chairman Guy de Selliers de Moranville Chief Executive Officer Hans De Cuyper Chief Financial Officer Christophe Boizard Chief Risk Officer Emmanuel Van Grimbergen Managing Director Europe Antonio Cano Managing Director Asia Filip Coremans Non-Executive Directors Richard Jackson Yvonne Lang Ketterer Jane Murphy Lionel Perl Lucrezia Reichlin Katleen Vandeweyer Jan Zegering Hadders Sonali Chandmal Jean-Michel Chatagny Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Statement of the Board of Director s NOTES TO ITEMS NOT RECORDED IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 256 Ageas Annual Report 2021 Events after the date of the statement of ﬁnancial position 256 | 240 On 15 February 2022, Ageas announced that its subsidiary Ageas UK Ltd had concluded an agreement with AXA Insurance UK PLC to sell its Commercial lines front book business. At the level of the Ageas Group the transaction will have an initial positive impact of EUR 45.5 million on the net results, which will be recorded in the first half of 2022. Ageas is carefully monitoring the developing situation in Ukraine and Russia, in particular with regards to indirect macro-economic effects such as the future evolution of interest rates and inflation in markets where we are active. The Group is not active in either country through subsidiaries or affiliates. Foreseeable direct impacts are judged to be immaterial, considering the insignificant direct exposure the Group has to these markets. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 44 Events after the date of the statement of financial position 257 | 240 The Board of Directors of Ageas is responsible for preparing the Ageas Consolidated Financial Statements as at 31 December 2021 in accordance with International Financial Reporting Standards as adopted by the European Union, as well as with the European Transparency Directive (2004/109/EC), and for presenting the Report of the Board of Directors in accordance with the legal and regulatory requirements applicable in Belgium. The Board of Directors has reviewed the Ageas Consolidated Financial Statements and the Report of the Board of Directors on 29 March 2022 and has authorised their issue. The Board of Directors of Ageas declares that, to the best of its knowledge, the Ageas Consolidated Financial Statements give a true and fair view of the assets, liabilities, financial position, and profit or loss of Ageas, and of the uncertainties that Ageas is facing and that the information contained therein has no omissions likely to modify significantly the scope of any statements made. The Board of Directors of Ageas also declares that the Report of the Board of Directors gives a fair overview of the development and performance of the businesses of the Group. The Ageas Annual Report consisting of the Consolidated Financial Statements and Report of the Board of Directors will be submitted to the Annual General Meeting of Shareholders for approval on 18 May 2022. Brussels, 29 March 2022 Board of Directors Chairman Bart De Smet Vice-Chairman Guy de Selliers de Moranville Chief Executive Officer Hans De Cuyper Chief Financial Officer Christophe Boizard Chief Risk Officer Emmanuel Van Grimbergen Managing Director Europe Antonio Cano Managing Director Asia Filip Coremans Non-Executive Directors Richard Jackson Yvonne Lang Ketterer Jane Murphy Lionel Perl Lucrezia Reichlin Katleen Vandeweyer Jan Zegering Hadders Sonali Chandmal Jean-Michel Chatagny Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Statement of the Board of Director s 257 Ageas Annual Report 2021 Statement of the Board of Directors 258 | 240 STATUTORY AUDITOR’S REPORT TO THE GENERAL SHAREHOLDERS’ MEETING OF AGEAS ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 We present to you our Statutory auditor’s report in the context of our statutory audit of the consolidated financial statements of Ageas (the “Company”) and its subsidiaries (jointly “the Group”). This report includes our report on the consolidated financial statements, as well as the other legal and regulatory requirements. This forms part of an integrated whole and is indivisible. We have been appointed as Statutory auditor by the General meeting d.d.19 May 2021, following the proposal formulated by the Board of directors and following the recommendation by the Audit committee. Our mandate will expire on the date of the General meeting which will deliberate on the annual financial statements for the year ended 31 December 2023. We have performed the statutory audit of the Company’s consolidated financial statements for four consecutive years. Report on the consolidated financial statements Unqualified opinion We have performed the statutory audit of the Group’s consolidated financial statements, which comprise the consolidated statement of financial position as at 31 December 2021, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flow for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information, and which is characterised by a consolidated statement of financial position total of EUR 111.139 million and a consolidated income statement which results in a profit for the year (“Net result for the period”) of EUR 1.016 million. In our opinion, the consolidated financial statements give a true and fair view of the Group’s net equity and consolidated financial position as at 31 December 2021, and of its consolidated financial performance and its consolidated cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. Basis for unqualified opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Belgium. Furthermore, we have applied the International Standards on Auditing as approved by the IAASB which are applicable to the year-end and which are not yet approved at the national level. Our responsibilities under those standards are further described in the “Statutory auditor’s responsibilities for the audit of the consolidated financial statements” section of our report. We have fulfilled our ethical responsibilities in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Belgium, including the requirements related to independence. We have obtained from the Board of directors and Company officials the explanations and information necessary for performing our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Independent Auditor’s Report 259 | 240 Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Adequacy of the amount of the technical provisions relating to insurance activities Description of the key audit matter As per 31 December 2021, the technical provisions amount to EUR 86.080 million as detailed in note 19 to the consolidated financial statements and represent approximately 77% of the Group’s balance sheet total. For technical provisions relating to non-life insurance activities, the provisions are mainly determined based on the prudent assessment made by claims managers, taking into account all the information available at the end of the accounting period. Regarding technical provisions relating to life insurance activities, the provisions are calculated based on actuarial techniques defined by law as well as in accordance with the technical parameters arising from the said insurance contracts. As mentioned in note 2.8.11 to the consolidated financial statements, as part of the closing of the financial year, an adequacy test is carried out to ensure that the (« life » and « non-life ») insurance liabilities are sufficient considering the expected future cash flows. When and where applicable, the technical provisions are increased by any shortfall resulting from the said adequacy test. The adequacy test of technical liabilities is based on actuarial techniques. It is relatively complex in that it is based on a number of assumptions that require significant judgement regarding future events. The latter may be influenced by future economic or business conditions as well as by laws and regulations specific to the insurance sector. The assumptions used within the adequacy test depend, with respect to non-life insurance activities, mainly on the amounts paid for claims, the number of claims incurred but not yet reported and claims expenses. For life insurance activities, the assumptions used depend mainly on mortality and longevity risks, effects related to the decrease in financial income (and in particular the interest rates) and overhead costs. In addition, the Group has elected to apply « shadow » accounting (an option permitted by « IFRS 4 »), introducing the possible recognition of an additional liability that would result from the application of this accounting option (hereinafter referred to as the « shadow provision »). For life insurance contracts and life investment contracts that are subject to « IFRS 4 » and which are not segregated funds, this shadow provision is determined as the negative difference between the result of the adequacy test (see previous paragraph) and net unrealised capital gains of investments allocated to these contracts. In view of the above, the measurement of the shadow provision is influenced by the result of the adequacy test. The aforementioned different elements, combined with the possible uncertainty related to modelling techniques and the discretionary nature of the assumptions used in the adequacy test, are the main reasons why we considered this topic as a key audit matter. Our audit procedures related to the key audit matter We carried out verifications regarding the operational effectiveness of the controls implemented by the Group in order to ensure the quality of the data used within the adequacy test of technical provisions. Supported by our in-house actuarial experts, we also assessed the relevance of the assumptions used in relation to current market conditions and their adequacy with respect to the technical results recorded during the year under review. For non-life insurance activities, we have independently recalculated the adequacy level of claims reserves based on recognised actuarial techniques. We then compared our results with those of the Group and obtained satisfying documentation regarding the significant differences observed. For life insurance activities, we have evaluated the analysis of movements in technical provisions prepared by management and, where necessary, analysed the reconciling items. We also ensured that the flows (inward and outward) used in the adequacy test of the technical provisions were consistent with those used in the calculation of the best estimate of insurance liabilities under the « Solvency II » framework. For a sample of contracts, we tested the accuracy of the key data included in the main technical systems and which is also used in the adequacy test of technical provisions. Finally, we corroborated our conclusions with the Group’s actuarial function. Based on the aforementioned audit procedures, we believe that the assumptions used in the adequacy test of technical provisions are reasonable in relation to the current market conditions and the technical results of the past financial year. NOTES TO ITEMS NOT RECORDED IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 258 Ageas Annual Report 2021 Independent Auditor’s Report 258 | 240 STATUTORY AUDITOR’S REPORT TO THE GENERAL SHAREHOLDERS’ MEETING OF AGEAS ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 We present to you our Statutory auditor’s report in the context of our statutory audit of the consolidated financial statements of Ageas (the “Company”) and its subsidiaries (jointly “the Group”). This report includes our report on the consolidated financial statements, as well as the other legal and regulatory requirements. This forms part of an integrated whole and is indivisible. We have been appointed as Statutory auditor by the General meeting d.d.19 May 2021, following the proposal formulated by the Board of directors and following the recommendation by the Audit committee. Our mandate will expire on the date of the General meeting which will deliberate on the annual financial statements for the year ended 31 December 2023. We have performed the statutory audit of the Company’s consolidated financial statements for four consecutive years. Report on the consolidated financial statements Unqualified opinion We have performed the statutory audit of the Group’s consolidated financial statements, which comprise the consolidated statement of financial position as at 31 December 2021, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flow for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information, and which is characterised by a consolidated statement of financial position total of EUR 111.139 million and a consolidated income statement which results in a profit for the year (“Net result for the period”) of EUR 1.016 million. In our opinion, the consolidated financial statements give a true and fair view of the Group’s net equity and consolidated financial position as at 31 December 2021, and of its consolidated financial performance and its consolidated cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. Basis for unqualified opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Belgium. Furthermore, we have applied the International Standards on Auditing as approved by the IAASB which are applicable to the year-end and which are not yet approved at the national level. Our responsibilities under those standards are further described in the “Statutory auditor’s responsibilities for the audit of the consolidated financial statements” section of our report. We have fulfilled our ethical responsibilities in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Belgium, including the requirements related to independence. We have obtained from the Board of directors and Company officials the explanations and information necessary for performing our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Independent Auditor’s Report 259 | 240 Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Adequacy of the amount of the technical provisions relating to insurance activities Description of the key audit matter As per 31 December 2021, the technical provisions amount to EUR 86.080 million as detailed in note 19 to the consolidated financial statements and represent approximately 77% of the Group’s balance sheet total. For technical provisions relating to non-life insurance activities, the provisions are mainly determined based on the prudent assessment made by claims managers, taking into account all the information available at the end of the accounting period. Regarding technical provisions relating to life insurance activities, the provisions are calculated based on actuarial techniques defined by law as well as in accordance with the technical parameters arising from the said insurance contracts. As mentioned in note 2.8.11 to the consolidated financial statements, as part of the closing of the financial year, an adequacy test is carried out to ensure that the (« life » and « non-life ») insurance liabilities are sufficient considering the expected future cash flows. When and where applicable, the technical provisions are increased by any shortfall resulting from the said adequacy test. The adequacy test of technical liabilities is based on actuarial techniques. It is relatively complex in that it is based on a number of assumptions that require significant judgement regarding future events. The latter may be influenced by future economic or business conditions as well as by laws and regulations specific to the insurance sector. The assumptions used within the adequacy test depend, with respect to non-life insurance activities, mainly on the amounts paid for claims, the number of claims incurred but not yet reported and claims expenses. For life insurance activities, the assumptions used depend mainly on mortality and longevity risks, effects related to the decrease in financial income (and in particular the interest rates) and overhead costs. In addition, the Group has elected to apply « shadow » accounting (an option permitted by « IFRS 4 »), introducing the possible recognition of an additional liability that would result from the application of this accounting option (hereinafter referred to as the « shadow provision »). For life insurance contracts and life investment contracts that are subject to « IFRS 4 » and which are not segregated funds, this shadow provision is determined as the negative difference between the result of the adequacy test (see previous paragraph) and net unrealised capital gains of investments allocated to these contracts. In view of the above, the measurement of the shadow provision is influenced by the result of the adequacy test. The aforementioned different elements, combined with the possible uncertainty related to modelling techniques and the discretionary nature of the assumptions used in the adequacy test, are the main reasons why we considered this topic as a key audit matter. Our audit procedures related to the key audit matter We carried out verifications regarding the operational effectiveness of the controls implemented by the Group in order to ensure the quality of the data used within the adequacy test of technical provisions. Supported by our in-house actuarial experts, we also assessed the relevance of the assumptions used in relation to current market conditions and their adequacy with respect to the technical results recorded during the year under review. For non-life insurance activities, we have independently recalculated the adequacy level of claims reserves based on recognised actuarial techniques. We then compared our results with those of the Group and obtained satisfying documentation regarding the significant differences observed. For life insurance activities, we have evaluated the analysis of movements in technical provisions prepared by management and, where necessary, analysed the reconciling items. We also ensured that the flows (inward and outward) used in the adequacy test of the technical provisions were consistent with those used in the calculation of the best estimate of insurance liabilities under the « Solvency II » framework. For a sample of contracts, we tested the accuracy of the key data included in the main technical systems and which is also used in the adequacy test of technical provisions. Finally, we corroborated our conclusions with the Group’s actuarial function. Based on the aforementioned audit procedures, we believe that the assumptions used in the adequacy test of technical provisions are reasonable in relation to the current market conditions and the technical results of the past financial year. 259 Ageas Annual Report 2021 260 | 240 Valuation of financial assets that are not listed on a regular market Description of the key audit matter The Group holds financial assets that are not listed on a regulated market. These mainly consist of corporate bonds, shares in unlisted companies and loans, details of which can be found in note 10.2 and 10.3, levels 2 and 3, to the consolidated financial statements. The techniques and models used to value these financial assets involve a variety of assumptions that include, for many of them, some degree of judgement. In addition, the number of elements that might affect the determination of the fair value depends both on the type of instrument and the instrument itself. As a result, the use of various valuation techniques and assumptions could lead to significantly different fair value estimates. The uncertainty associated with these valuation techniques and models selected per type of instrument is the main reason why we considered this subject as a key audit matter. Our audit procedures related to the key audit matter We obtained an understanding of the internal control system for the valuation of financial assets, including controls over pricing and the model validation process. We selected a sample of financial assets and, with the assistance of our valuation experts, reviewed the estimates made and the main assumptions used in determining their fair value, taking into account market data. Where necessary, we also tested the standing data used in the determination of fair value. Our experts have, for a sample of selected financial assets, independently recalculated the fair value. Finally, we verified compliance with the application of the accounting policies adopted by the Group. We believe that the main assumptions used in the determination of the market value are reasonable. Our independent tests did not reveal any significant exception in determining the market value of investments for which a quoted price in an active market is not available. Responsibilities of the Board of directors for the preparation of the consolidated financial statements The Board of directors is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium, and for such internal control as the Board of directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the Board of directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Statutory auditor’s responsibilities for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. In performing our audit, we comply with the legal, regulatory and normative framework applicable to the audit of the consolidated financial statements in Belgium. A statutory audit does not provide any assurance as to the Group’s future viability nor as to the efficiency or effectiveness of the Board of directors’ current or future business management at Group level. Our responsibilities in respect of the use of the going concern basis of accounting by the Board of directors are described below. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:  identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain 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 one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;  obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control;  evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of directors;  conclude on the appropriateness of the Board of directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Statutory auditor’s report to the related disclosures in the consolidated financial 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 Statutory auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern; 261 | 240  evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation;  obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the Audit committee 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. We also provide the Audit committee 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. From the matters communicated with the Audit committee, we determine those matters that were of most significance in the audit of the consolidated 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. Other legal and regulatory requirements Responsibilities of the Board of directors The Board of directors is responsible for the preparation and the content of the directors’ report on the consolidated financial statements. Statutory auditor’s responsibilities In the context of our engagement and in accordance with the Belgian standard which is complementary to the International Standards on Auditing (ISAs) as applicable in Belgium, our responsibility is to verify, in all material respects, the directors’ report on the consolidated financial statements and to report on these matters. Aspects related to the directors’ report on the consolidated financial statements In our opinion, after having performed specific procedures in relation to the directors’ report on the consolidated financial statements, this directors’ report is consistent with the consolidated financial statements for the year under audit and is prepared in accordance with article 3:32 of the Companies' and Associations' Code. In the context of our audit of the consolidated financial statements, we are also responsible for considering, in particular based on the knowledge acquired resulting from the audit, whether the directors’ report is materially misstated or contains information which is inadequately disclosed or otherwise misleading. In light of the procedures we have performed, there are no material misstatements we have to report to you. The non-financial information required by virtue of article 3:32, §2 of the Companies' and Associations' Code is included in the directors’ report on the consolidated financial statements. The Company has prepared the non-financial information, based on the United Nations “Sustainable Development Goals”. However, in accordance with article 3:80, §1, 5° of the Companies' and Associations' Code, we do not express an opinion as to whether the non-financial information has been prepared in accordance with the said framework as disclosed in the directors’ report on the consolidated financial statements. Statements related to independence  Our registered audit firm and our network did not provide services which are incompatible with the statutory audit of the consolidated financial statements and our registered audit firm remained independent of the Group in the course of our mandate.  The fees for additional services which are compatible with the statutory audit of the consolidated financial statements referred to in article 3:65 of the Companies' and Associations' Code are correctly disclosed and itemised in the notes to the consolidated financial statements. NOTES TO ITEMS NOT RECORDED IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 260 Ageas Annual Report 2021 260 | 240 Valuation of financial assets that are not listed on a regular market Description of the key audit matter The Group holds financial assets that are not listed on a regulated market. These mainly consist of corporate bonds, shares in unlisted companies and loans, details of which can be found in note 10.2 and 10.3, levels 2 and 3, to the consolidated financial statements. The techniques and models used to value these financial assets involve a variety of assumptions that include, for many of them, some degree of judgement. In addition, the number of elements that might affect the determination of the fair value depends both on the type of instrument and the instrument itself. As a result, the use of various valuation techniques and assumptions could lead to significantly different fair value estimates. The uncertainty associated with these valuation techniques and models selected per type of instrument is the main reason why we considered this subject as a key audit matter. Our audit procedures related to the key audit matter We obtained an understanding of the internal control system for the valuation of financial assets, including controls over pricing and the model validation process. We selected a sample of financial assets and, with the assistance of our valuation experts, reviewed the estimates made and the main assumptions used in determining their fair value, taking into account market data. Where necessary, we also tested the standing data used in the determination of fair value. Our experts have, for a sample of selected financial assets, independently recalculated the fair value. Finally, we verified compliance with the application of the accounting policies adopted by the Group. We believe that the main assumptions used in the determination of the market value are reasonable. Our independent tests did not reveal any significant exception in determining the market value of investments for which a quoted price in an active market is not available. Responsibilities of the Board of directors for the preparation of the consolidated financial statements The Board of directors is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium, and for such internal control as the Board of directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the Board of directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Statutory auditor’s responsibilities for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. In performing our audit, we comply with the legal, regulatory and normative framework applicable to the audit of the consolidated financial statements in Belgium. A statutory audit does not provide any assurance as to the Group’s future viability nor as to the efficiency or effectiveness of the Board of directors’ current or future business management at Group level. Our responsibilities in respect of the use of the going concern basis of accounting by the Board of directors are described below. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:  identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain 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 one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;  obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control;  evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of directors;  conclude on the appropriateness of the Board of directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Statutory auditor’s report to the related disclosures in the consolidated financial 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 Statutory auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern; 261 | 240  evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation;  obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the Audit committee 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. We also provide the Audit committee 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. From the matters communicated with the Audit committee, we determine those matters that were of most significance in the audit of the consolidated 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. Other legal and regulatory requirements Responsibilities of the Board of directors The Board of directors is responsible for the preparation and the content of the directors’ report on the consolidated financial statements. Statutory auditor’s responsibilities In the context of our engagement and in accordance with the Belgian standard which is complementary to the International Standards on Auditing (ISAs) as applicable in Belgium, our responsibility is to verify, in all material respects, the directors’ report on the consolidated financial statements and to report on these matters. Aspects related to the directors’ report on the consolidated financial statements In our opinion, after having performed specific procedures in relation to the directors’ report on the consolidated financial statements, this directors’ report is consistent with the consolidated financial statements for the year under audit and is prepared in accordance with article 3:32 of the Companies' and Associations' Code. In the context of our audit of the consolidated financial statements, we are also responsible for considering, in particular based on the knowledge acquired resulting from the audit, whether the directors’ report is materially misstated or contains information which is inadequately disclosed or otherwise misleading. In light of the procedures we have performed, there are no material misstatements we have to report to you. The non-financial information required by virtue of article 3:32, §2 of the Companies' and Associations' Code is included in the directors’ report on the consolidated financial statements. The Company has prepared the non-financial information, based on the United Nations “Sustainable Development Goals”. However, in accordance with article 3:80, §1, 5° of the Companies' and Associations' Code, we do not express an opinion as to whether the non-financial information has been prepared in accordance with the said framework as disclosed in the directors’ report on the consolidated financial statements. Statements related to independence  Our registered audit firm and our network did not provide services which are incompatible with the statutory audit of the consolidated financial statements and our registered audit firm remained independent of the Group in the course of our mandate.  The fees for additional services which are compatible with the statutory audit of the consolidated financial statements referred to in article 3:65 of the Companies' and Associations' Code are correctly disclosed and itemised in the notes to the consolidated financial statements. 2 61 Ageas Annual Report 2021 262 | 240 European Uniform Electronic Format (ESEF) We have also verified, in accordance with the draft standard on the verification of the compliance of the financial statements with the European Uniform Electronic Format (hereinafter “ESEF”), the compliance of the ESEF format with the regulatory technical standards established by the European Delegate Regulation No. 2019/815 of 17 December 2018 (hereinafter: “Delegated Regulation”). The board of directors is responsible for the preparation, in accordance with ESEF requirements, of the consolidated financial statements in the form of an electronic file in ESEF format (hereinafter “consolidated financial statements”) included in the annual financial report. Our responsibility is to obtain sufficient appropriate evidence to conclude that the format and marking language of the digital consolidated financial statements comply in all material respects with the ESEF requirements under the Delegated Regulation. Based on the work we have performed, we believe that the format of and marking of information in the digital consolidated financial statements included in the annual financial report of Ageas per 31 December 2021 comply in all material respects with the ESEF requirements under the Delegated Regulation. Other statement This report is consistent with the additional report to the Audit committee referred to in article 79 of the law of 13 March 2016 on the legal status and supervision of insurance or reinsurance companies, which makes reference to article 11 of the Regulation (EU) N° 537/2014. Diegem, 29 March 2022 The Statutory auditor PwC Reviseurs d'Entreprises SRL / PwC Bedrijfsrevisoren BV Represented by Roland Jeanquart Kurt Cappoen Réviseur d’Entreprises / Réviseur d’Entreprises / Bedrijfsrevisor Bedrijfsrevisor NOTES TO ITEMS NOT RECORDED IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 262 Ageas Annual Report 2021 262 | 240 European Uniform Electronic Format (ESEF) We have also verified, in accordance with the draft standard on the verification of the compliance of the financial statements with the European Uniform Electronic Format (hereinafter “ESEF”), the compliance of the ESEF format with the regulatory technical standards established by the European Delegate Regulation No. 2019/815 of 17 December 2018 (hereinafter: “Delegated Regulation”). The board of directors is responsible for the preparation, in accordance with ESEF requirements, of the consolidated financial statements in the form of an electronic file in ESEF format (hereinafter “consolidated financial statements”) included in the annual financial report. Our responsibility is to obtain sufficient appropriate evidence to conclude that the format and marking language of the digital consolidated financial statements comply in all material respects with the ESEF requirements under the Delegated Regulation. Based on the work we have performed, we believe that the format of and marking of information in the digital consolidated financial statements included in the annual financial report of Ageas per 31 December 2021 comply in all material respects with the ESEF requirements under the Delegated Regulation. Other statement This report is consistent with the additional report to the Audit committee referred to in article 79 of the law of 13 March 2016 on the legal status and supervision of insurance or reinsurance companies, which makes reference to article 11 of the Regulation (EU) N° 537/2014. Diegem, 29 March 2022 The Statutory auditor PwC Reviseurs d'Entreprises SRL / PwC Bedrijfsrevisoren BV Represented by Roland Jeanquart Kurt Cappoen Réviseur d’Entreprises / Réviseur d’Entreprises / Bedrijfsrevisor Bedrijfsrevisor 263 Ageas Annual Report 2021 G ageas SA/NV Statutory Accounts 2021 264 | 240 1. Foreword Most ‘general information’ is included in the Report of the Board of Directors of Ageas. This section of general information contains solely information on ageas SA/NV that has not been provided elsewhere. 2. Identification The company is a public limited liability company bearing the name ageas SA/NV. Its registered office is at Rue du Marquis 1, 1000 Brussels. The company is registered in the Brussels register of legal entities under no. 0451.406.524. 3. Incorporation and publication The company was incorporated on 6 November 1993 under the name Fortis Capital Holding. 4. Places where the public can verify company documents The Articles of Association of ageas SA/NV can be inspected at the Registry of the Commercial Court at Brussels, at the company’s registered office and at the website of Ageas. Decisions on the appointment and resignation of Board Members of the companies are published, among other places, in the annexes to the Belgian Official Gazette. Financial reports on the companies and notices convening General Meetings are published in the financial press, newspapers and periodicals. The financial statements of the company are available at the registered office and are also filed with the National Bank of Belgium. They are sent each year to registered shareholders and to others on request. 5. Amounts All amounts stated in the additional disclosures are denominated in millions of euros, unless otherwise indicated. 6. Audit opinion PwC issued an unqualified auditor’s report on the ageas SA/NV company financial statements. 7. Reinsurance Ageas SA/NV has a reinsurance licence for both Life and Non-Life activities. Internal Reinsurance operations (Mainly Quota-share (QS) and Loss Portfolio Transfers (LPT) arrangements) have been set up with several ageas group companies. The group companies involved are mainly the Non-Life entities of Portugal, AG Insurance, Ageas Insurance Limited and Ageas France. Furthermore some Reinsurance operations with the Joint Venture companies of ageas SA/NV were set up, however these are quite limited. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). General information Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 265 | 240 1.1 Statutory results of ageas SA/NV under Belgian Accounting Principles ageas SA/NV reported for the financial year 2021 a net profit of EUR 505 million (2020: EUR 672 million) and a shareholders’ equity of EUR 5,570 million (2020: EUR 5,687 million). 1.2 Notes to the balance sheet and income statement 1.2.1 Assets 1.2.1.1 Intangible fixed assets (2021: EUR 12 million; 2020: EUR 13 million) 1.2.1.2 Investments (2021: EUR 9,199 million; 2020: EUR 9,032 million) Investments in participating interests (EUR 7,359 million) The investments in Ageas Insurance International (EUR 6,436 million) and Royal Park Investments (EUR 0.03 million) showed a small decrease compared to 31 December 2020 (small decrease due to further capital reduction in Royal Park Investments). Notes, bonds and receivables consist of loans to affiliates (EUR 923 million) and participating interest (EUR 6,436 million). The large movement compared to last year stems from new loans (EUR 40 million – Interparking and EUR 65 million – Maybank Ageas Holding Berhad) and pay back of loans to Ageas Insurance International (EUR 176 million) and Ageas UK (EUR 9 million: i.e. EUR 20 million – partially offset by GBP FX revaluation of EUR 11 million). Other investments (EUR 987 million) These comprises of an equity portfolio (EUR 59 million), fixed income securities (EUR 658 million) and deposits with credit institutions (EUR 270 million). Deposits with ceding companies (EUR 852 million) This section comprises of deposits received related to incoming reinsurance agreements with funds withheld agreement. 1.2.1.3 Part of the reinsurer in the technical provisions (2021: EUR 59 million; 2020: EUR 52 million) 1.2.1.4 Debtors (2021: EUR 507 million; 2020: EUR 720 million) Receivables include EUR 114 million related to the ForSettlement Foundation. 1.2.1.5 Other assets (2021: EUR 337 million; 2020: EUR 319 million) Treasury shares (2021: EUR 197 million; 2020: EUR 272 million) This section comprises of treasury shares acquired through share buy- back programmes, purchase of Treasury shares from affiliates and treasury shares acquired to cover the restricted share plans for some members of staff and directors of the company. 1.2.1.6 Prepayments and accrued income (2021: EUR 28 million; 2020: EUR 26 million) Accrued income relates mainly to accrued interests on intercompany loans. Disclosure on items in the statement of financial position and income statement and regulatory requirements Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). AGEAS SA/NV STATUTORY ACCOUNTS 2021 264 Ageas Annual Report 2021 General information 264 | 240 1. Foreword Most ‘general information’ is included in the Report of the Board of Directors of Ageas. This section of general information contains solely information on ageas SA/NV that has not been provided elsewhere. 2. Identification The company is a public limited liability company bearing the name ageas SA/NV. Its registered office is at Rue du Marquis 1, 1000 Brussels. The company is registered in the Brussels register of legal entities under no. 0451.406.524. 3. Incorporation and publication The company was incorporated on 6 November 1993 under the name Fortis Capital Holding. 4. Places where the public can verify company documents The Articles of Association of ageas SA/NV can be inspected at the Registry of the Commercial Court at Brussels, at the company’s registered office and at the website of Ageas. Decisions on the appointment and resignation of Board Members of the companies are published, among other places, in the annexes to the Belgian Official Gazette. Financial reports on the companies and notices convening General Meetings are published in the financial press, newspapers and periodicals. The financial statements of the company are available at the registered office and are also filed with the National Bank of Belgium. They are sent each year to registered shareholders and to others on request. 5. Amounts All amounts stated in the additional disclosures are denominated in millions of euros, unless otherwise indicated. 6. Audit opinion PwC issued an unqualified auditor’s report on the ageas SA/NV company financial statements. 7. Reinsurance Ageas SA/NV has a reinsurance licence for both Life and Non-Life activities. Internal Reinsurance operations (Mainly Quota-share (QS) and Loss Portfolio Transfers (LPT) arrangements) have been set up with several ageas group companies. The group companies involved are mainly the Non-Life entities of Portugal, AG Insurance, Ageas Insurance Limited and Ageas France. Furthermore some Reinsurance operations with the Joint Venture companies of ageas SA/NV were set up, however these are quite limited. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). General information Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 265 | 240 1.1 Statutory results of ageas SA/NV under Belgian Accounting Principles ageas SA/NV reported for the financial year 2021 a net profit of EUR 505 million (2020: EUR 672 million) and a shareholders’ equity of EUR 5,570 million (2020: EUR 5,687 million). 1.2 Notes to the balance sheet and income statement 1.2.1 Assets 1.2.1.1 Intangible fixed assets (2021: EUR 12 million; 2020: EUR 13 million) 1.2.1.2 Investments (2021: EUR 9,199 million; 2020: EUR 9,032 million) Investments in participating interests (EUR 7,359 million) The investments in Ageas Insurance International (EUR 6,436 million) and Royal Park Investments (EUR 0.03 million) showed a small decrease compared to 31 December 2020 (small decrease due to further capital reduction in Royal Park Investments). Notes, bonds and receivables consist of loans to affiliates (EUR 923 million) and participating interest (EUR 6,436 million). The large movement compared to last year stems from new loans (EUR 40 million – Interparking and EUR 65 million – Maybank Ageas Holding Berhad) and pay back of loans to Ageas Insurance International (EUR 176 million) and Ageas UK (EUR 9 million: i.e. EUR 20 million – partially offset by GBP FX revaluation of EUR 11 million). Other investments (EUR 987 million) These comprises of an equity portfolio (EUR 59 million), fixed income securities (EUR 658 million) and deposits with credit institutions (EUR 270 million). Deposits with ceding companies (EUR 852 million) This section comprises of deposits received related to incoming reinsurance agreements with funds withheld agreement. 1.2.1.3 Part of the reinsurer in the technical provisions (2021: EUR 59 million; 2020: EUR 52 million) 1.2.1.4 Debtors (2021: EUR 507 million; 2020: EUR 720 million) Receivables include EUR 114 million related to the ForSettlement Foundation. 1.2.1.5 Other assets (2021: EUR 337 million; 2020: EUR 319 million) Treasury shares (2021: EUR 197 million; 2020: EUR 272 million) This section comprises of treasury shares acquired through share buy- back programmes, purchase of Treasury shares from affiliates and treasury shares acquired to cover the restricted share plans for some members of staff and directors of the company. 1.2.1.6 Prepayments and accrued income (2021: EUR 28 million; 2020: EUR 26 million) Accrued income relates mainly to accrued interests on intercompany loans. Disclosure on items in the statement of financial position and income statement and regulatory requirements Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 265 Ageas Annual Report 2021 Disclosure on items in the statement of ﬁnancial position and income statement and regulatory requirements 266 | 240 1.2.2 Liabilities 1.2.2.1 Equity (2021: EUR 5,570 million; 2020: EUR 5,687 million) Subscribed capital (2021: EUR 1,502 million; 2020: EUR 1,502 million) Share premium reserve (2021: EUR 2,051 million; 2020: EUR 2,051 million) Legal reserve (2021: EUR 125 million; 2020: EUR 100 million) 5 percent of the profit available for appropriation was allocated to the legal reserve. Reserves not available for distribution (2021: EUR 219 million; 2020: EUR 294 million) Reserves not available for distribution are set up for own shares held by ageas and by affiliates. Reserves available for distribution (2021: EUR 813 million; 2020: EUR 865 million) The decrease in the reserves available for distribution reflects mainly the transfer to the reserves not available for distribution related to the buy-back of own shares (EUR 56 million). Profit/loss carried forward (2021: EUR 860 million; 2020: EUR 875 million) The 2021 financial year closed with a profit of EUR 505 million. After profit appropriation to the legal reserves (EUR 25 million) and the proposed dividend (EUR 495 million, i.e. EUR 2.75 per share), the profit to be carried forward amounts to EUR 860 million. 1.2.2.2 Subordinated liabilities (2021: EUR 1,745 million; 2020: EUR 1,745 million) No changes in 2021 to be reported. Previously, 3 subordinated liabilities had been issued:  On 10 April 2019 ageas SA/NV issued its inaugural debt securities in the form of EUR 500 million Subordinated Fixed to Floating Rate Notes maturing in 2049.  On 10 December 2019 ageas SA/NV issued subordinated debt securities for an aggregate principal amount of EUR 750 million in the form of Perpetual Subordinated Fixed Rate Resettable Temporary Write-Down Restricted Tier 1 Notes.  On 17 November 2020, ageas SA/NV issued subordinated debt securities in the form of EUR 500 million Subordinated Fixed to Floating Rate Notes maturing in 2051. 1.2.2.3 Technical Provisions (2021: EUR 1,563 million; 2020: EUR 1,373 million) The unearned premiums reserves (EUR 332 million) and claims reserves (EUR 1,196 million) relate to intra-group incoming reinsurance programs. An equalization reserve has been set up (EUR 34 million). 1.2.2.4 Provisions (2021: EUR 635 million; 2020: EUR 666 million) The decrease in the provisions is mainly explained by reduction (EUR 132 million) in the provision for the settlement mainly following payments to eligible shareholders in 2020 and the increase in the RPN(I) provision (EUR 101 million). See note 25 ‘Provisions’ of the Consolidated Financial Statements for more details. 1.2.2.5 Creditors (2021: EUR 591 million; 2020: EUR 654 million) The decrease in amounts payable is mainly explained by the settlement of a vendor note (EUR 107 million) partially compensated by an increase in payables relating to the reinsurance activity. (EUR 44 million). 1.2.2.6 Accruals and deferred costs (2021: EUR 37 million; 2020: EUR 36 million) Deferred costs mainly relate to the accrued interests on the subordinated liabilities. 1.2.3 Income statement 1.2.3.1 Balance on the technical account non-life business (2021: EUR 84 million; 2020: EUR 54 million) This result mainly comprises the result on the Non-Life Quota Share and Loss Portfolio Transfer incoming reinsurance contracts. The increase is mainly related to an increase in premiums received partially offset by a small increase of the claims ratio in 2021. 1.2.3.2 Balance on the technical account life business (2021: EUR 2 million; 2020: EUR 1 million) 1.2.3.3 Non technical account: Investment income (2021: EUR 657 million; 2020: EUR 811 million) Investment income includes mainly the dividend received from Ageas Insurance International (EUR 612 million) and the interests on loans to affiliates (EUR 43 million). 1.2.3.4 Non technical account: Investments charges (2021: EUR 84 million; 2020: EUR 75 million) These charges include the interests on the subordinated liabilities (EUR 55 million). 1.2.3.5 Other income (2021: EUR 39 million; 2020: EUR 52 million) The decrease in other income relates to the adjustment on the ForSettlement provision (EUR 13 million). 1.2.3.6 Other charges (2021: EUR 193 million; 2020: EUR 172 million) The components of the charges are as follows:  Services and miscellaneous goods ....................... EUR 53 million  Staff expenses...................................................... EUR 30 million  Costs settlement foundations ............................... EUR 7 million  Settlement amount RPN(I) .................................... EUR 101 million 267 | 240 1.3 Regulatory requirements (art. 3:6 and 3:32 of the Belgian Company Code) Conflicts of interest Due to conflicts of interest and as required by article 7:96 of the Company Code, extract of the minutes of the relevant meetings of the Board of Directors are included in the current Report of the Board of Directors. 1.3.1 Information on circumstances that could profoundly influence the development of the company See note ‘Forward-looking statements to be treated with caution’. 1.3.2 Information on research and development The company did not carry out any research and development activities. 1.3.3 Branches Not Applicable. 1.3.4 Events after the date of the statement of financial position There have been no material events after the date of the financial statements that would require adjustment or amounts recognised or disclosed in the Financial Statements as of 31 December 2021. 1.3.5 Other information that according to the Belgian Company Code should be included in the Annual Report Discharge of the directors and external auditor As prescribed by law and the company’s Articles of Association, we will request the General Meeting of Shareholders to grant the company’s Board of Directors and Auditor discharge in respect of the execution of their mandate. Capital increase and issue of warrants In 2021 no capital increase or issue of warrants was made. Non-audit assignments carried out by the auditor In 2021, the external auditor carried out an additional assignment. Use of financial instruments See note 4 ‘Risk Management’ of the Consolidated Financial Statements. Corporate Governance Statement See Report of the Board of Directors, part 5 ‘Corporate Governance Statement’, in the Annual Report. Remuneration report See Report of the Board of Directors, part 5.7 ‘Report of the Remuneration Committee’, in the Annual Report. AGEAS SA/NV STATUTORY ACCOUNTS 2021 266 Ageas Annual Report 2021 266 | 240 1.2.2 Liabilities 1.2.2.1 Equity (2021: EUR 5,570 million; 2020: EUR 5,687 million) Subscribed capital (2021: EUR 1,502 million; 2020: EUR 1,502 million) Share premium reserve (2021: EUR 2,051 million; 2020: EUR 2,051 million) Legal reserve (2021: EUR 125 million; 2020: EUR 100 million) 5 percent of the profit available for appropriation was allocated to the legal reserve. Reserves not available for distribution (2021: EUR 219 million; 2020: EUR 294 million) Reserves not available for distribution are set up for own shares held by ageas and by affiliates. Reserves available for distribution (2021: EUR 813 million; 2020: EUR 865 million) The decrease in the reserves available for distribution reflects mainly the transfer to the reserves not available for distribution related to the buy-back of own shares (EUR 56 million). Profit/loss carried forward (2021: EUR 860 million; 2020: EUR 875 million) The 2021 financial year closed with a profit of EUR 505 million. After profit appropriation to the legal reserves (EUR 25 million) and the proposed dividend (EUR 495 million, i.e. EUR 2.75 per share), the profit to be carried forward amounts to EUR 860 million. 1.2.2.2 Subordinated liabilities (2021: EUR 1,745 million; 2020: EUR 1,745 million) No changes in 2021 to be reported. Previously, 3 subordinated liabilities had been issued:  On 10 April 2019 ageas SA/NV issued its inaugural debt securities in the form of EUR 500 million Subordinated Fixed to Floating Rate Notes maturing in 2049.  On 10 December 2019 ageas SA/NV issued subordinated debt securities for an aggregate principal amount of EUR 750 million in the form of Perpetual Subordinated Fixed Rate Resettable Temporary Write-Down Restricted Tier 1 Notes.  On 17 November 2020, ageas SA/NV issued subordinated debt securities in the form of EUR 500 million Subordinated Fixed to Floating Rate Notes maturing in 2051. 1.2.2.3 Technical Provisions (2021: EUR 1,563 million; 2020: EUR 1,373 million) The unearned premiums reserves (EUR 332 million) and claims reserves (EUR 1,196 million) relate to intra-group incoming reinsurance programs. An equalization reserve has been set up (EUR 34 million). 1.2.2.4 Provisions (2021: EUR 635 million; 2020: EUR 666 million) The decrease in the provisions is mainly explained by reduction (EUR 132 million) in the provision for the settlement mainly following payments to eligible shareholders in 2020 and the increase in the RPN(I) provision (EUR 101 million). See note 25 ‘Provisions’ of the Consolidated Financial Statements for more details. 1.2.2.5 Creditors (2021: EUR 591 million; 2020: EUR 654 million) The decrease in amounts payable is mainly explained by the settlement of a vendor note (EUR 107 million) partially compensated by an increase in payables relating to the reinsurance activity. (EUR 44 million). 1.2.2.6 Accruals and deferred costs (2021: EUR 37 million; 2020: EUR 36 million) Deferred costs mainly relate to the accrued interests on the subordinated liabilities. 1.2.3 Income statement 1.2.3.1 Balance on the technical account non-life business (2021: EUR 84 million; 2020: EUR 54 million) This result mainly comprises the result on the Non-Life Quota Share and Loss Portfolio Transfer incoming reinsurance contracts. The increase is mainly related to an increase in premiums received partially offset by a small increase of the claims ratio in 2021. 1.2.3.2 Balance on the technical account life business (2021: EUR 2 million; 2020: EUR 1 million) 1.2.3.3 Non technical account: Investment income (2021: EUR 657 million; 2020: EUR 811 million) Investment income includes mainly the dividend received from Ageas Insurance International (EUR 612 million) and the interests on loans to affiliates (EUR 43 million). 1.2.3.4 Non technical account: Investments charges (2021: EUR 84 million; 2020: EUR 75 million) These charges include the interests on the subordinated liabilities (EUR 55 million). 1.2.3.5 Other income (2021: EUR 39 million; 2020: EUR 52 million) The decrease in other income relates to the adjustment on the ForSettlement provision (EUR 13 million). 1.2.3.6 Other charges (2021: EUR 193 million; 2020: EUR 172 million) The components of the charges are as follows:  Services and miscellaneous goods ....................... EUR 53 million  Staff expenses...................................................... EUR 30 million  Costs settlement foundations ............................... EUR 7 million  Settlement amount RPN(I) .................................... EUR 101 million 267 | 240 1.3 Regulatory requirements (art. 3:6 and 3:32 of the Belgian Company Code) Conflicts of interest Due to conflicts of interest and as required by article 7:96 of the Company Code, extract of the minutes of the relevant meetings of the Board of Directors are included in the current Report of the Board of Directors. 1.3.1 Information on circumstances that could profoundly influence the development of the company See note ‘Forward-looking statements to be treated with caution’. 1.3.2 Information on research and development The company did not carry out any research and development activities. 1.3.3 Branches Not Applicable. 1.3.4 Events after the date of the statement of financial position There have been no material events after the date of the financial statements that would require adjustment or amounts recognised or disclosed in the Financial Statements as of 31 December 2021. 1.3.5 Other information that according to the Belgian Company Code should be included in the Annual Report Discharge of the directors and external auditor As prescribed by law and the company’s Articles of Association, we will request the General Meeting of Shareholders to grant the company’s Board of Directors and Auditor discharge in respect of the execution of their mandate. Capital increase and issue of warrants In 2021 no capital increase or issue of warrants was made. Non-audit assignments carried out by the auditor In 2021, the external auditor carried out an additional assignment. Use of financial instruments See note 4 ‘Risk Management’ of the Consolidated Financial Statements. Corporate Governance Statement See Report of the Board of Directors, part 5 ‘Corporate Governance Statement’, in the Annual Report. Remuneration report See Report of the Board of Directors, part 5.7 ‘Report of the Remuneration Committee’, in the Annual Report. 267 Ageas Annual Report 2021 268 | 240 10 EUR NAT. Date of the deposition N° P. U. D. C1. ANNUAL ACCOUNTS IN EUROS NAME ..................................................................................................................................................... : AGEAS Legal form ............................................................................................................................................... : NV Address .................................................................................................................................................. : Markiesstraat 1 – Box 7 Postal code ............................................................................................................................................. : 1000 Municipality ............................................................................................................................................. : Brussels Register of Legal Persons (RLP) - Office of the commercial court at ...................................................... : Brussels, nederlandstalige Internet address ...................................................................................................................................... : www.ageas.com Company number ................................................................................................................................... : 451.406.524 Date ........................................................................................................................................................ : 2020-07-03 of the deposition of the partnership deed OR of the most recent document mentioning the date of publication of the partnership deed and the act changing the articles of association ANNUAL ACCOUNTS approved by the General Meeting of ................................................................... : 2022-05-18 concerning the financial year covering the period from ........................................................................... : 2021-01-01 to 2021-12-31 previous period from .............................................................................................................................. : 2020-01-01 to 2020-12-31 The amounts of the previous financial year are identical to those previously published ......................... : yes / no ** COMPLETE LIST WITH name, first name, profession, residence-address (address, number, postal code, municipality) and position with the enterprise of the DIRECTORS, MANAGERS and AUDITORS DE SMET Bart, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Chairman of the Board, mandate from 22/10/2020 to 19/05/2021 and from 19/05/2021 to 21/05/2025 DE CUYPER Hans, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 22/10/2020 to 15/05/2024 CANO Antonio, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 20/05/2020 to 15/05/2024 de SELLIERS de MORANVILLE Guy, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Vice Chairman of the Board, mandate from 15/05/2019 to 17/05/2023 VANDEWEYER Kathleen, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 17/05/2017 to 19/05/2021 and from 19/05/2021 to 21/05/2025 PERL Lionel, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 15/05/2019 to 19/05/2021 MURPHY Jane, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 20/05/2020 to 15/05/2024 COREMANS Filip, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 15/05/2019 to 17/05/2023 BOIZARD Christophe, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 15/05/2019 to 17/05/2023 (Page C1.a continued, if applicable) Attached to these annual accounts are the following: - the statutory auditors' report - the management report Total number of pages deposited: .......................................................................................................... : Number of the pages of the standard form not deposited for not being of service .................................. : Signature Signature (name and function) (name and function) Bart De Smet - Chairman of the Board Hans De Cuyper - CEO * Optional statement. ** Delete where appropriate. 269 | 240 10 EUR NAT. Date of the deposition N° P. U. D. C1. COMPLETE LIST WITH name, first name, profession, residence-address (address, number, postal code, municipality) and position with the enterprise of the DIRECTORS, MANAGERS and AUDITORS JACKSON Richard, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 20/05/2020 to 15/05/2024 LANG KETTERER Yvonne, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 20/05/2020 to 15/05/2024 REICHLIN Lucrezia, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 20/05/2020 to 15/05/2024 CHANDMAL Sonali, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 16/05/2018 to 18/05/2022 VAN GRIMBERGEN Emmanuel, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 15/05/2019 to 17/05/2023 HADDERS Jan Zegering, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 15/05/2019 to 19/05/2021 CHATAGNY Jean-Michel, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 19/05/2021 to 21/05/2025 PwC Reviseurs d'Entreprises srl / Bedrijfsrevisoren bv ,Culliganlaan 5, 1831 Diegem, Belgium Statutory auditor, represented by Mr. CAPPOEN Kurt (membership number A01969) and JEANQUART Roland (membership number A01313) Mandate from 16/05/2018 to 19/05/2021 and from 19/05/2021 to 15/05/2024 AGEAS SA/NV STATUTORY ACCOUNTS 2021 268 Ageas Annual Report 2021 268 | 240 10 EUR NAT. Date of the deposition N° P. U. D. C1. ANNUAL ACCOUNTS IN EUROS NAME ..................................................................................................................................................... : AGEAS Legal form ............................................................................................................................................... : NV Address .................................................................................................................................................. : Markiesstraat 1 – Box 7 Postal code ............................................................................................................................................. : 1000 Municipality ............................................................................................................................................. : Brussels Register of Legal Persons (RLP) - Office of the commercial court at ...................................................... : Brussels, nederlandstalige Internet address ...................................................................................................................................... : www.ageas.com Company number ................................................................................................................................... : 451.406.524 Date ........................................................................................................................................................ : 2020-07-03 of the deposition of the partnership deed OR of the most recent document mentioning the date of publication of the partnership deed and the act changing the articles of association ANNUAL ACCOUNTS approved by the General Meeting of ................................................................... : 2022-05-18 concerning the financial year covering the period from ........................................................................... : 2021-01-01 to 2021-12-31 previous period from .............................................................................................................................. : 2020-01-01 to 2020-12-31 The amounts of the previous financial year are identical to those previously published ......................... : yes / no ** COMPLETE LIST WITH name, first name, profession, residence-address (address, number, postal code, municipality) and position with the enterprise of the DIRECTORS, MANAGERS and AUDITORS DE SMET Bart, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Chairman of the Board, mandate from 22/10/2020 to 19/05/2021 and from 19/05/2021 to 21/05/2025 DE CUYPER Hans, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 22/10/2020 to 15/05/2024 CANO Antonio, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 20/05/2020 to 15/05/2024 de SELLIERS de MORANVILLE Guy, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Vice Chairman of the Board, mandate from 15/05/2019 to 17/05/2023 VANDEWEYER Kathleen, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 17/05/2017 to 19/05/2021 and from 19/05/2021 to 21/05/2025 PERL Lionel, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 15/05/2019 to 19/05/2021 MURPHY Jane, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 20/05/2020 to 15/05/2024 COREMANS Filip, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 15/05/2019 to 17/05/2023 BOIZARD Christophe, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 15/05/2019 to 17/05/2023 (Page C1.a continued, if applicable) Attached to these annual accounts are the following: - the statutory auditors' report - the management report Total number of pages deposited: .......................................................................................................... : Number of the pages of the standard form not deposited for not being of service .................................. : Signature Signature (name and function) (name and function) Bart De Smet - Chairman of the Board Hans De Cuyper - CEO * Optional statement. ** Delete where appropriate. 269 | 240 10 EUR NAT. Date of the deposition N° P. U. D. C1. COMPLETE LIST WITH name, first name, profession, residence-address (address, number, postal code, municipality) and position with the enterprise of the DIRECTORS, MANAGERS and AUDITORS JACKSON Richard, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 20/05/2020 to 15/05/2024 LANG KETTERER Yvonne, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 20/05/2020 to 15/05/2024 REICHLIN Lucrezia, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 20/05/2020 to 15/05/2024 CHANDMAL Sonali, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 16/05/2018 to 18/05/2022 VAN GRIMBERGEN Emmanuel, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 15/05/2019 to 17/05/2023 HADDERS Jan Zegering, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 15/05/2019 to 19/05/2021 CHATAGNY Jean-Michel, Markiesstraat 1 bus 7, 1000 Brussels, Belgium, Director, mandate from 19/05/2021 to 21/05/2025 PwC Reviseurs d'Entreprises srl / Bedrijfsrevisoren bv ,Culliganlaan 5, 1831 Diegem, Belgium Statutory auditor, represented by Mr. CAPPOEN Kurt (membership number A01969) and JEANQUART Roland (membership number A01313) Mandate from 16/05/2018 to 19/05/2021 and from 19/05/2021 to 15/05/2024 269 Ageas Annual Report 2021 270 | 240 VAT EUR C1.a The managing board declares that the assignment neither regarding auditing nor adjusting has been given to a person who was not authorised by law pursuant to art. 34 and 37 of the Law of 22nd April 1999 concerning the auditing and tax professions. Have the annual accounts been audited or adjusted by an external accountant or auditor who is not a statutory auditor? YES / NO (1). If YES, mention here after: name, first names, profession, residence-address of each external accountant or auditor, the number of membership with the professional Institute ad hoc and the nature of this engagement: A. Bookkeeping of the undertaking (2), B. Preparing the annual accounts (2), C. Auditing the annual accounts, D. Adjusting the annual accounts. If the assignment mentioned either under A (Bookkeeping of the undertaking) or B (Preparing the annual accounts) is performed by authorised accountants or authorised accountants-tax consultants, information will be given on: name, first names, (1) Delete where appropriate. (2) Optional statement. Name, first names, profession and residence-address Number of membership Nature of the engagement (A, B, C and/or D) 271 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) Current Previous Current Previous Assets Codes period period Liabilities Codes period period A. - - A. Shareholders’ equity (statement 5) 11 5,570,129,147 5,687,437,539 I. Subscribed capital B. Intangible assets (statement 1) 21 11,695,245 12,728,534 or fund equivalent, I. Formation expenses 211 11,603,033 12,448,772 net of capital uncalled 111 1,502,364,273 1,502,364,273 II. Intangible assets 212 92,212 279,762 1. Subscribed capital 111.1 1,502,364,273 1,502,364,273 1. Goodwill 212.1 2. Uncalled capital (-) 111.2 2. Other intangible assets 212.2 92,212 279,762 II. Share premium reserve 112 2,050,976,359 2,050,976,359 3. Prepayments 212.3 III. Revaluation reserve 113 IV. Reserves 114 1,156,654,350 1,258,977,709 C. Investments (statements 1, 2 and 3) 22 9,198,833,400 9,031,607,834 1. Legal reserve 114.1 125,060,297 99,801,708 I. Land and buildings (statement 1) 221 2. Unavailable reserve 114.2 218,514,432 294,312,045 1. Real estate for own activities a) for own shares 114.21 218,514,432 294,312,045 as part of its own business 221.1 b) other 114.22 2. Other 221.2 3. Untaxed reserve 114.3 II. Investments in affiliated undertakings and 4. Available reserve 114.4 813,079,621 864,863,957 participating interests (statements 1, 2 and 18) 222 7,359,411,181 7,264,121,749 V. Result carried forward 115 860,134,165 875,119,198 - Affiliated undertakings 222.1 7,293,892,953 7,262,381,935 1. Profit carried forward 115.1 860,134,165 875,119,198 1. Participating interests 222.11 6,436,159,584 6,436,159,584 2. Loss carried forward (-) 115.2 2. Notes, bonds and receivables 222.12 857,733,369 826,222,351 VI. - - - Undertakings linked by virtue of a participating interest 222.2 65,518,228 1,739,814 B. Subordinated liabilities 3. Participating interests 222.21 29,927 1,739,814 (statements 7 and 18) 12 1,745,427,640 1,744,860,670 4. Notes, bonds and receivables 222.22 65,488,301 III. Other financial investments 223 987,214,268 986,216,420 Bbis Funds for future 1. Equities, shares and other dotations 13 variable income securities (statement 1) 223.1 58,726,861 54,077,627 2. Debt securities and other C. Technical provisions fixed-income securities (statement 1) 223.2 658,480,395 582,131,782 (statement 7) 14 1,562,792,214 1,372,683,963 3. Participating in investment I. Provisions for unearned pools 223.3 premiums and unexpired risks 141 332,447,484 316,933,343 4. Loans and mortgages 223.4 II. Life insurance provision 142 5. Other loans 223.5 III. Claims reserve 143 1,196,287,848 1,021,355,376 6. Deposits with other credit institutions 223.6 270,007,011 350,007,011 IV. Provision for bonuses 7. Other 223.7 and rebates 144 IV. Deposits with ceding undertakings 224 852,207,952 781,269,664 V. Provision for equalization and catastrophes 145 34,056,882 34,395,244 D. Investments relating to VI. Other technical provisions 146 operations linked to an investment fund group's "life" D. Technical provisions relating activities where the risk is to operations linked to an not borne by the company investment fund group's "Life" i.e. Unit-Linked products 23 activities where the risk is not borne by the company i.e. Unit-Linked products (statement 7) 15 AGEAS SA/NV STATUTORY ACCOUNTS 2021 270 Ageas Annual Report 2021 270 | 240 VAT EUR C1.a The managing board declares that the assignment neither regarding auditing nor adjusting has been given to a person who was not authorised by law pursuant to art. 34 and 37 of the Law of 22nd April 1999 concerning the auditing and tax professions. Have the annual accounts been audited or adjusted by an external accountant or auditor who is not a statutory auditor? YES / NO (1). If YES, mention here after: name, first names, profession, residence-address of each external accountant or auditor, the number of membership with the professional Institute ad hoc and the nature of this engagement: A. Bookkeeping of the undertaking (2), B. Preparing the annual accounts (2), C. Auditing the annual accounts, D. Adjusting the annual accounts. If the assignment mentioned either under A (Bookkeeping of the undertaking) or B (Preparing the annual accounts) is performed by authorised accountants or authorised accountants-tax consultants, information will be given on: name, first names, (1) Delete where appropriate. (2) Optional statement. Name, first names, profession and residence-address Number of membership Nature of the engagement (A, B, C and/or D) 271 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) Current Previous Current Previous Assets Codes period period Liabilities Codes period period A. - - A. Shareholders’ equity (statement 5) 11 5,570,129,147 5,687,437,539 I. Subscribed capital B. Intangible assets (statement 1) 21 11,695,245 12,728,534 or fund equivalent, I. Formation expenses 211 11,603,033 12,448,772 net of capital uncalled 111 1,502,364,273 1,502,364,273 II. Intangible assets 212 92,212 279,762 1. Subscribed capital 111.1 1,502,364,273 1,502,364,273 1. Goodwill 212.1 2. Uncalled capital (-) 111.2 2. Other intangible assets 212.2 92,212 279,762 II. Share premium reserve 112 2,050,976,359 2,050,976,359 3. Prepayments 212.3 III. Revaluation reserve 113 IV. Reserves 114 1,156,654,350 1,258,977,709 C. Investments (statements 1, 2 and 3) 22 9,198,833,400 9,031,607,834 1. Legal reserve 114.1 125,060,297 99,801,708 I. Land and buildings (statement 1) 221 2. Unavailable reserve 114.2 218,514,432 294,312,045 1. Real estate for own activities a) for own shares 114.21 218,514,432 294,312,045 as part of its own business 221.1 b) other 114.22 2. Other 221.2 3. Untaxed reserve 114.3 II. Investments in affiliated undertakings and 4. Available reserve 114.4 813,079,621 864,863,957 participating interests (statements 1, 2 and 18) 222 7,359,411,181 7,264,121,749 V. Result carried forward 115 860,134,165 875,119,198 - Affiliated undertakings 222.1 7,293,892,953 7,262,381,935 1. Profit carried forward 115.1 860,134,165 875,119,198 1. Participating interests 222.11 6,436,159,584 6,436,159,584 2. Loss carried forward (-) 115.2 2. Notes, bonds and receivables 222.12 857,733,369 826,222,351 VI. - - - Undertakings linked by virtue of a participating interest 222.2 65,518,228 1,739,814 B. Subordinated liabilities 3. Participating interests 222.21 29,927 1,739,814 (statements 7 and 18) 12 1,745,427,640 1,744,860,670 4. Notes, bonds and receivables 222.22 65,488,301 III. Other financial investments 223 987,214,268 986,216,420 Bbis Funds for future 1. Equities, shares and other dotations 13 variable income securities (statement 1) 223.1 58,726,861 54,077,627 2. Debt securities and other C. Technical provisions fixed-income securities (statement 1) 223.2 658,480,395 582,131,782 (statement 7) 14 1,562,792,214 1,372,683,963 3. Participating in investment I. Provisions for unearned pools 223.3 premiums and unexpired risks 141 332,447,484 316,933,343 4. Loans and mortgages 223.4 II. Life insurance provision 142 5. Other loans 223.5 III. Claims reserve 143 1,196,287,848 1,021,355,376 6. Deposits with other credit institutions 223.6 270,007,011 350,007,011 IV. Provision for bonuses 7. Other 223.7 and rebates 144 IV. Deposits with ceding undertakings 224 852,207,952 781,269,664 V. Provision for equalization and catastrophes 145 34,056,882 34,395,244 D. Investments relating to VI. Other technical provisions 146 operations linked to an investment fund group's "life" D. Technical provisions relating activities where the risk is to operations linked to an not borne by the company investment fund group's "Life" i.e. Unit-Linked products 23 activities where the risk is not borne by the company i.e. Unit-Linked products (statement 7) 15 271 Ageas Annual Report 2021 272 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) Current Previous Current Previous Assets Codes period period Liabilities Codes period period Dbis. Reinsurers' share E. Provisions for other risks of technical provisions 24 58,573,396 52,013,297 and charges 16 634,775,225 666,042,856 I. Provisions for unearned I. Provisions for pensions and premiums and unexpired risks 241 1,602,252 842,415 similar obligations 161 II. Life insurance provision 242 II. Provisions for taxes 162 III. Claims outstanding 243 56,971,143 51,170,882 III. Other provisions (statement 6) 163 634,775,225 666,042,856 IV. Provision for profit-sharing and retrocessions 244 F. Desposits received from V. Other technical provisions 245 reinsureres 17 VI. Provisions related to operations related to an investment fund of the "life" business group when the investment risk is not borne by the company 246 G. Debts (statements 7 and 18) 42 590,710,245 654,072,485 E. Receivables (statements 18 and 19) 41 506,633,785 719,940,883 I. Payables from direct I. Receivables from direct insurance operations 421 insurance operations 411 II. Reinsurance payables 422 1. Policyholders 411.1 III. Unsubordinated bonds 423 64,577,872 20,324,418 2. Insurance intermediaries 411.2 1. Convertible bonds 423.1 3. Other 411.3 2. Non-convertible bonds 423.2 II. Receivables from 412 IV. Amounts payable to reinsurance operations 81,891,610 15,164,021 credit institutions 424 III. Other receivables 413 424,742,175 704,776,862 V. Other amounts payable 425 526,132,373 633,748,067 IV. Subscribed capital called but not paid 414 1. Tax, salary and social liabilities 425.1 6,116,446 5,878,515 a) Taxes 425.11 F. Other assets 25 336,958,055 319,036,790 b) Remuneration 25,621 25,621 I. Tangible assets 251 820,089 782,370 social charges 425.12 6,090,826 5,852,895 II. Cash at bank and in hand 252 139,098,212 45,596,762 2. Other 425.2 520,015,926 627,869,552 III. Own shares 253 197,027,252 272,645,156 IV. Other 254 12,503 12,503 H. Accrued charges and deferred income (statement 8) 434/436 36,642,202 35,966,269 G. Accrued charges and deferred income (statement 4) 431/433 27,782,795 25,736,445 I. Accrued interest and rent 431 22,985,496 21,686,623 II. Acquisition costs carried forward 432 1. Non-life insurance operations 432.1 2. Life insurance operations 432.2 III. Other accrued charges and deferred income 433 4,797,299 4,049,822 TOTAL 21/43 10,140,476,675 10,161,063,783 TOTAL 11/43 10,140,476,675 10,161,063,783 273 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) I. Non-life technical account Current Previous Name Codes period period 1. Premiums earned, net of reinsurance 710 1,414,323,152 1,343,303,325 a) Gross premiums written (statement 10) 710.1 1,512,236,974 1,406,998,161 b) Outward reinsurance premiums (-) 710.2 (83,159,518) (55,588,030) c) Change in the gross provisions for unearned premiums and in the provision for unexpired risks, gross amount 710.3 (15,514,141) (8,949,221) d) Change in provisions for unearned premiums and unexpired risks, reinsurers’ share 710.4 759,837 842,415 2. Allocated investment income transferred from the non-technical account (item 6) 711 2bis. Investment income 712 28,534,930 20,774,887 a) Income from investments in affiliated undertakings or in 712.1 undertakings by a participating interest aa) Affiliated undertakings 712.11 1° Participations 712,111 2° Notes, bonds and receivables 712,112 bb) Undertakings linked by virtue of a participating interest 712.12 1° Participations 712,121 2° Notes, bonds and receivables 712,122 b) Income from other investments 712.2 28,534,930 20,774,887 aa) Income from land and buildings 712.21 bb) Income from other investments 712.22 28,534,930 20,774,887 c) Reversals of valuation adjustments on investments 712.3 d) Gains on the realisation of investments 712.4 3. Other technical income, net of reinsurance 714 (1) 1,757,781 4. Claims incurred, net of reinsurance (-) 610 (856,284,152) (771,299,681) a) Claims paid, net of reinsurance 610.1 692,563,504 645,071,639 aa) gross amounts (statement 10) 610.11 724,373,437 651,310,261 bb) reinsurers’ share (-) 610.12 (31,809,933) (6,238,622) b) Change in provision for claims, gross of reinsurance (increase +, decrease -) 610.2 163,720,648 126,228,042 aa) Change in provisions for claims, gross amount (statement 10) (increase +,decrease -) 610.21 169,520,909 154,721,732 bb) Change in provisions for claims, reinsurers' share (increase -, decrease +) 610.22 (5,800,261) (28,493,690) AGEAS SA/NV STATUTORY ACCOUNTS 2021 272 Ageas Annual Report 2021 272 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) Current Previous Current Previous Assets Codes period period Liabilities Codes period period Dbis. Reinsurers' share E. Provisions for other risks of technical provisions 24 58,573,396 52,013,297 and charges 16 634,775,225 666,042,856 I. Provisions for unearned I. Provisions for pensions and premiums and unexpired risks 241 1,602,252 842,415 similar obligations 161 II. Life insurance provision 242 II. Provisions for taxes 162 III. Claims outstanding 243 56,971,143 51,170,882 III. Other provisions (statement 6) 163 634,775,225 666,042,856 IV. Provision for profit-sharing and retrocessions 244 F. Desposits received from V. Other technical provisions 245 reinsureres 17 VI. Provisions related to operations related to an investment fund of the "life" business group when the investment risk is not borne by the company 246 G. Debts (statements 7 and 18) 42 590,710,245 654,072,485 E. Receivables (statements 18 and 19) 41 506,633,785 719,940,883 I. Payables from direct I. Receivables from direct insurance operations 421 insurance operations 411 II. Reinsurance payables 422 1. Policyholders 411.1 III. Unsubordinated bonds 423 64,577,872 20,324,418 2. Insurance intermediaries 411.2 1. Convertible bonds 423.1 3. Other 411.3 2. Non-convertible bonds 423.2 II. Receivables from 412 IV. Amounts payable to reinsurance operations 81,891,610 15,164,021 credit institutions 424 III. Other receivables 413 424,742,175 704,776,862 V. Other amounts payable 425 526,132,373 633,748,067 IV. Subscribed capital called but not paid 414 1. Tax, salary and social liabilities 425.1 6,116,446 5,878,515 a) Taxes 425.11 F. Other assets 25 336,958,055 319,036,790 b) Remuneration 25,621 25,621 I. Tangible assets 251 820,089 782,370 social charges 425.12 6,090,826 5,852,895 II. Cash at bank and in hand 252 139,098,212 45,596,762 2. Other 425.2 520,015,926 627,869,552 III. Own shares 253 197,027,252 272,645,156 IV. Other 254 12,503 12,503 H. Accrued charges and deferred income (statement 8) 434/436 36,642,202 35,966,269 G. Accrued charges and deferred income (statement 4) 431/433 27,782,795 25,736,445 I. Accrued interest and rent 431 22,985,496 21,686,623 II. Acquisition costs carried forward 432 1. Non-life insurance operations 432.1 2. Life insurance operations 432.2 III. Other accrued charges and deferred income 433 4,797,299 4,049,822 TOTAL 21/43 10,140,476,675 10,161,063,783 TOTAL 11/43 10,140,476,675 10,161,063,783 273 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) I. Non-life technical account Current Previous Name Codes period period 1. Premiums earned, net of reinsurance 710 1,414,323,152 1,343,303,325 a) Gross premiums written (statement 10) 710.1 1,512,236,974 1,406,998,161 b) Outward reinsurance premiums (-) 710.2 (83,159,518) (55,588,030) c) Change in the gross provisions for unearned premiums and in the provision for unexpired risks, gross amount 710.3 (15,514,141) (8,949,221) d) Change in provisions for unearned premiums and unexpired risks, reinsurers’ share 710.4 759,837 842,415 2. Allocated investment income transferred from the non-technical account (item 6) 711 2bis. Investment income 712 28,534,930 20,774,887 a) Income from investments in affiliated undertakings or in 712.1 undertakings by a participating interest aa) Affiliated undertakings 712.11 1° Participations 712,111 2° Notes, bonds and receivables 712,112 bb) Undertakings linked by virtue of a participating interest 712.12 1° Participations 712,121 2° Notes, bonds and receivables 712,122 b) Income from other investments 712.2 28,534,930 20,774,887 aa) Income from land and buildings 712.21 bb) Income from other investments 712.22 28,534,930 20,774,887 c) Reversals of valuation adjustments on investments 712.3 d) Gains on the realisation of investments 712.4 3. Other technical income, net of reinsurance 714 (1) 1,757,781 4. Claims incurred, net of reinsurance (-) 610 (856,284,152) (771,299,681) a) Claims paid, net of reinsurance 610.1 692,563,504 645,071,639 aa) gross amounts (statement 10) 610.11 724,373,437 651,310,261 bb) reinsurers’ share (-) 610.12 (31,809,933) (6,238,622) b) Change in provision for claims, gross of reinsurance (increase +, decrease -) 610.2 163,720,648 126,228,042 aa) Change in provisions for claims, gross amount (statement 10) (increase +,decrease -) 610.21 169,520,909 154,721,732 bb) Change in provisions for claims, reinsurers' share (increase -, decrease +) 610.22 (5,800,261) (28,493,690) 273 Ageas Annual Report 2021 274 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) I. Non-life technical account Current Previous Name Codes period period 5. Change in other technical provisions, net of reinsurance (increase -, decrease +) 611 6. Bonus and rebates, net of reinsurance (-) 612 7. Net operating expenses (-) 613 (548,049,307) (516,087,950) a) Acquisition costs 613.1 552,668,944 517,802,122 b) Change in the amount of acquisition costs carried expensed in assets (increase -, decrease +) 613.2 c) Administration expenses 613.3 2,596,568 2,687,677 d) Commissions received from reinsurers and profit-sharing (-) 613.4 (7,216,204) (4,401,849) 7bis. Investment expenses (-) 614 (7,169,126) (6,384,102) a) Investment management expenses 614.1 7,169,126 5,742,211 b) Valuation adjustments on investments 614.2 c) Losses on disposals 614.3 641,891 8. Other technical costs, net of reinsurance (-) 616 52,276,959 9. Change in provisions for equalisation and disasters, net of reinsurance (increase -, decrease +) 619 (338,362) 17,773,424 10. Result of the non-life technical account Profit (+) 710 / 619 83,970,817 54,290,837 Loss (-) 619 / 710 275 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) II. Life technical account Current Previous Name Codes period period 1. Net reinsurance premiums 720 44,245,200 14,958,856 a) Gross premiums written (statement 10) 720.1 44,245,200 14,958,856 b) Outward reinsurance premiums (-) 720.2 2. Investment income 722 a) Income from investments in affiliated undertakings or in undertakings by a participating interest 722.1 aa) Affiliated undertakings 722.11 1° Participations 722,111 2° Notes, bonds and receivables 722,112 bb) Undertakings linked by virtue of a participating interest 722.12 1° Participations 722,121 2° Notes, bonds and receivables 722,122 b) Income from other investments 722.2 aa) Income from land and buildings 722.21 bb) Income from other investments 722.22 c) Reversals of valuation adjustments on investments 722.3 d) Gains on the realisation of investments 722.4 3. Valuation adjustments on investments of item D. in assets (income) 723 4. Other technical income, net of reinsurance 724 5. Cost of claims, net of reinsurance (-) 620 (36,428,975) (8,308,269) a) Net amounts paid 620.1 31,029,408 866,965 aa) gross amounts 620.11 31,029,408 866,965 bb) reinsurers’ share (-) 620.12 b) Change in provision for claims, net of reinsurance (increase +, decrease -) 620.2 5,399,567 7,441,304 aa) Change in provisions for claims, gross from reinsurance (increase +, decrease -) 620.21 5,399,567 7,441,304 bb) Change in provisions for claims, share of reinsurers (increase -, decrease +) 620.22 AGEAS SA/NV STATUTORY ACCOUNTS 2021 274 Ageas Annual Report 2021 274 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) I. Non-life technical account Current Previous Name Codes period period 5. Change in other technical provisions, net of reinsurance (increase -, decrease +) 611 6. Bonus and rebates, net of reinsurance (-) 612 7. Net operating expenses (-) 613 (548,049,307) (516,087,950) a) Acquisition costs 613.1 552,668,944 517,802,122 b) Change in the amount of acquisition costs carried expensed in assets (increase -, decrease +) 613.2 c) Administration expenses 613.3 2,596,568 2,687,677 d) Commissions received from reinsurers and profit-sharing (-) 613.4 (7,216,204) (4,401,849) 7bis. Investment expenses (-) 614 (7,169,126) (6,384,102) a) Investment management expenses 614.1 7,169,126 5,742,211 b) Valuation adjustments on investments 614.2 c) Losses on disposals 614.3 641,891 8. Other technical costs, net of reinsurance (-) 616 52,276,959 9. Change in provisions for equalisation and disasters, net of reinsurance (increase -, decrease +) 619 (338,362) 17,773,424 10. Result of the non-life technical account Profit (+) 710 / 619 83,970,817 54,290,837 Loss (-) 619 / 710 275 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) II. Life technical account Current Previous Name Codes period period 1. Net reinsurance premiums 720 44,245,200 14,958,856 a) Gross premiums written (statement 10) 720.1 44,245,200 14,958,856 b) Outward reinsurance premiums (-) 720.2 2. Investment income 722 a) Income from investments in affiliated undertakings or in undertakings by a participating interest 722.1 aa) Affiliated undertakings 722.11 1° Participations 722,111 2° Notes, bonds and receivables 722,112 bb) Undertakings linked by virtue of a participating interest 722.12 1° Participations 722,121 2° Notes, bonds and receivables 722,122 b) Income from other investments 722.2 aa) Income from land and buildings 722.21 bb) Income from other investments 722.22 c) Reversals of valuation adjustments on investments 722.3 d) Gains on the realisation of investments 722.4 3. Valuation adjustments on investments of item D. in assets (income) 723 4. Other technical income, net of reinsurance 724 5. Cost of claims, net of reinsurance (-) 620 (36,428,975) (8,308,269) a) Net amounts paid 620.1 31,029,408 866,965 aa) gross amounts 620.11 31,029,408 866,965 bb) reinsurers’ share (-) 620.12 b) Change in provision for claims, net of reinsurance (increase +, decrease -) 620.2 5,399,567 7,441,304 aa) Change in provisions for claims, gross from reinsurance (increase +, decrease -) 620.21 5,399,567 7,441,304 bb) Change in provisions for claims, share of reinsurers (increase -, decrease +) 620.22 275 Ageas Annual Report 2021 276 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) II. Life technical account Current Previous Name Codes period period 6. Change in other technical provisions, net of of reinsurance (increase -, decrease +) 621 0 0 a) Change in provision for life insurance, net from reinsurance (increase -, decrease +) 621.1 0 0 aa) change in life insurance provision, gross of reinsurance (increase -,decrease +) 621.11 0 0 bb) change in life insurance provision, reinsurers’ share (increase +, decrease -) 621.12 0 0 b) Change in other technical provisions net of reinsurance (increase -, decrease +) 621.2 0 0 7. Profit-sharing and retrocessions, net of reinsurance (-) 622 0 0 8. Net operating expenses (-) 623 (6,094,077) (5,277,584) a) Acquisition costs 623.1 5,444,935 5,235,128 b) Change in the amount of acquisition costs carried expensed in assets (increase -, decrease +) 0 0 c) Management costs 623.3 649,142 42,456 d) Commissions received from reinsurers and profit-sharing (-) 623.4 0 0 9. Investment expenses (-) 624 0 0 a) Investment management expenses 624.1 0 0 b) Valuation adjustments on investments 624.2 0 0 c) Losses on disposals 624.3 0 0 10. Valuation adjustments on investments of item D. in assets (costs) (-) 625 0 0 11. Other technical costs, net of reinsurance (-) 626 0 0 12. Allocated investment income transferred to the non-technical account (item 4) (-) 627 0 0 12bis. Change in fund for future provisions (increase -, decrease +) 628 0 0 13. Result of the life technical account Profit (+) 720 / 628 1,722,148 1,373,003 Loss (-) 628 / 720 0 0 277 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) III. Non-technical account Current Previous Name Codes period period 1. Result of the technical account - non-life insurance business (item 10) Profit (+) (710 / 619) 83,970,817 54,290,837 Loss (-) (619 / 710) 0 0 2. Result of the technical account - life insurance business (item 13) Profit (+) (720 / 628) 1,722,148 1,373,003 Loss (-) (628 / 720) 0 0 3. Investment income 730 656,697,569 810,922,368 a) Income from investments in affiliated undertakings or in undertakings by a participating interest 730.1 656,503,830 804,898,016 b) Income from other investments 730.2 193,739 236,700 aa) Income from land and buildings 730.21 0 0 bb) Income from other investments 730.22 193,739 236,700 c) Reversals of valuation adjustments on investments 730.3 0 0 d) Gains on the realisation of investments 730.4 0 5,787,653 4. Allocated investment income, transferred from 731 0 0 the life technical account (item 12) 5. Investment expenses (-) 630 (83,620,891) (75,374,004) a) Investment management expenses 630.1 83,620,891 75,374,004 b) Valuation adjustments on investments 630.2 0 0 c) Losses on the realisation of investments 630.3 0 0 6. Allocated investment income, transferred to the non-life technical account (item 2) (-) 631 0 0 7. Other income (statement 13) 732 39,221,928 52,342,001 8. Other charges (statement 13) (-) 632 (192,746,943) (171,749,888) 8bis. Profit or loss on ordinary activities before taks Profit (+) 710 / 632 505,244,628 671,804,316 Loss (-) 632 / 710 0 0 9. - - 0 0 10. - - 0 0 AGEAS SA/NV STATUTORY ACCOUNTS 2021 276 Ageas Annual Report 2021 276 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) II. Life technical account Current Previous Name Codes period period 6. Change in other technical provisions, net of of reinsurance (increase -, decrease +) 621 0 0 a) Change in provision for life insurance, net from reinsurance (increase -, decrease +) 621.1 0 0 aa) change in life insurance provision, gross of reinsurance (increase -,decrease +) 621.11 0 0 bb) change in life insurance provision, reinsurers’ share (increase +, decrease -) 621.12 0 0 b) Change in other technical provisions net of reinsurance (increase -, decrease +) 621.2 0 0 7. Profit-sharing and retrocessions, net of reinsurance (-) 622 0 0 8. Net operating expenses (-) 623 (6,094,077) (5,277,584) a) Acquisition costs 623.1 5,444,935 5,235,128 b) Change in the amount of acquisition costs carried expensed in assets (increase -, decrease +) 0 0 c) Management costs 623.3 649,142 42,456 d) Commissions received from reinsurers and profit-sharing (-) 623.4 0 0 9. Investment expenses (-) 624 0 0 a) Investment management expenses 624.1 0 0 b) Valuation adjustments on investments 624.2 0 0 c) Losses on disposals 624.3 0 0 10. Valuation adjustments on investments of item D. in assets (costs) (-) 625 0 0 11. Other technical costs, net of reinsurance (-) 626 0 0 12. Allocated investment income transferred to the non-technical account (item 4) (-) 627 0 0 12bis. Change in fund for future provisions (increase -, decrease +) 628 0 0 13. Result of the life technical account Profit (+) 720 / 628 1,722,148 1,373,003 Loss (-) 628 / 720 0 0 277 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) III. Non-technical account Current Previous Name Codes period period 1. Result of the technical account - non-life insurance business (item 10) Profit (+) (710 / 619) 83,970,817 54,290,837 Loss (-) (619 / 710) 0 0 2. Result of the technical account - life insurance business (item 13) Profit (+) (720 / 628) 1,722,148 1,373,003 Loss (-) (628 / 720) 0 0 3. Investment income 730 656,697,569 810,922,368 a) Income from investments in affiliated undertakings or in undertakings by a participating interest 730.1 656,503,830 804,898,016 b) Income from other investments 730.2 193,739 236,700 aa) Income from land and buildings 730.21 0 0 bb) Income from other investments 730.22 193,739 236,700 c) Reversals of valuation adjustments on investments 730.3 0 0 d) Gains on the realisation of investments 730.4 0 5,787,653 4. Allocated investment income, transferred from 731 0 0 the life technical account (item 12) 5. Investment expenses (-) 630 (83,620,891) (75,374,004) a) Investment management expenses 630.1 83,620,891 75,374,004 b) Valuation adjustments on investments 630.2 0 0 c) Losses on the realisation of investments 630.3 0 0 6. Allocated investment income, transferred to the non-life technical account (item 2) (-) 631 0 0 7. Other income (statement 13) 732 39,221,928 52,342,001 8. Other charges (statement 13) (-) 632 (192,746,943) (171,749,888) 8bis. Profit or loss on ordinary activities before taks Profit (+) 710 / 632 505,244,628 671,804,316 Loss (-) 632 / 710 0 0 9. - - 0 0 10. - - 0 0 277 Ageas Annual Report 2021 278 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) III. Non-technical account Current Previous Name Codes period period 11. Extraordinary income (statement 14) 733 0 0 12. Extraordinary expenses (statement 14) (-) 633 0 0 13. Extraordinary result Profit (+) 733 / 633 0 0 Loss (-) 633 / 733 0 0 14. - - 0 0 15. Taxes on income (-/+) 634 / 734 72,858 146,856 15bis. Deferred taxes (-/+) 635 / 735 0 0 16. Profit/(loss) for the financial year Profit (+) 710 / 635 505,171,770 671,657,460 Loss (-) 635 / 710 0 0 17. a) Withdrawals from untaxed reserves 736 0 0 b) Transfers to untaxed reserves (-) 636 0 0 18. Profit/(loss) for the financial year Profit (+) 710 / 636 505,171,770 671,657,460 Loss (-) 636 / 710 0 0 279 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) III. Non-technical account Current Previous Name Codes period period A. Profit to be appropriated 710 / 637.1 1,380,290,968 1,393,742,555 Loss to be appropriated (-) 637.1 / 710 0 0 1. Profit for the financial year available for appropriation 710 / 636 505,171,770 671,657,460 Loss for the financial year available for appropriation (-) 636 / 710 0 0 2. Profit carried forward from the previous financial year 737.1 875,119,198 722,085,095 Loss carried forward from the previous financial year (-) 637.1 0 0 B. Transfers from shareholders’ equity 737.2 / 737.3 0 435,621,265 1. from the capital and share premium reserves 737.2 0 0 2. from reserves 737.3 0 435,621,265 C. Allocations to equity (-) 637.2 / 637.3 (25,258,589) (33,582,873) 1. to the capital and share premium reserves 637.2 0 0 2. to legal reserve 637.31 25,258,589 33,582,873 3. to other reserves 637.32 0 0 D. Result to be carried forward 1. Profit to be carried forward (-) 637.4 (860,134,165) (875,119,198) 2. Loss to be carried forward 737.4 0 0 E. Partners’ participation in the loss 737.5 0 0 F. Profit to be distributed (-) 637.5 / 637.7 (494,898,214) (920,661,749) 1. Dividends 637.5 494,898,214 920,661,749 2. Directors or managers 637.6 0 0 3. Other recipients 637.7 0 0 AGEAS SA/NV STATUTORY ACCOUNTS 2021 278 Ageas Annual Report 2021 278 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) III. Non-technical account Current Previous Name Codes period period 11. Extraordinary income (statement 14) 733 0 0 12. Extraordinary expenses (statement 14) (-) 633 0 0 13. Extraordinary result Profit (+) 733 / 633 0 0 Loss (-) 633 / 733 0 0 14. - - 0 0 15. Taxes on income (-/+) 634 / 734 72,858 146,856 15bis. Deferred taxes (-/+) 635 / 735 0 0 16. Profit/(loss) for the financial year Profit (+) 710 / 635 505,171,770 671,657,460 Loss (-) 635 / 710 0 0 17. a) Withdrawals from untaxed reserves 736 0 0 b) Transfers to untaxed reserves (-) 636 0 0 18. Profit/(loss) for the financial year Profit (+) 710 / 636 505,171,770 671,657,460 Loss (-) 636 / 710 0 0 279 | 240 Annex to the Royal Decree on the annual accounts of insurance companies Chapter I. Structure of the annual accounts Section I. Balance sheet at 31/12/2021 (in Euro units) III. Non-technical account Current Previous Name Codes period period A. Profit to be appropriated 710 / 637.1 1,380,290,968 1,393,742,555 Loss to be appropriated (-) 637.1 / 710 0 0 1. Profit for the financial year available for appropriation 710 / 636 505,171,770 671,657,460 Loss for the financial year available for appropriation (-) 636 / 710 0 0 2. Profit carried forward from the previous financial year 737.1 875,119,198 722,085,095 Loss carried forward from the previous financial year (-) 637.1 0 0 B. Transfers from shareholders’ equity 737.2 / 737.3 0 435,621,265 1. from the capital and share premium reserves 737.2 0 0 2. from reserves 737.3 0 435,621,265 C. Allocations to equity (-) 637.2 / 637.3 (25,258,589) (33,582,873) 1. to the capital and share premium reserves 637.2 0 0 2. to legal reserve 637.31 25,258,589 33,582,873 3. to other reserves 637.32 0 0 D. Result to be carried forward 1. Profit to be carried forward (-) 637.4 (860,134,165) (875,119,198) 2. Loss to be carried forward 737.4 0 0 E. Partners’ participation in the loss 737.5 0 0 F. Profit to be distributed (-) 637.5 / 637.7 (494,898,214) (920,661,749) 1. Dividends 637.5 494,898,214 920,661,749 2. Directors or managers 637.6 0 0 3. Other recipients 637.7 0 0 279 Ageas Annual Report 2021 280 | 240 No. 1. Statement of intangible assets, investment property and investment securities Asset items Asset items Asset items concerned concerned concerned B. C.I. C.II.1. C.II.2. C.II.3. C.II.4. C.III.1. C.III.2. Names Codes Intangible Land and Participations in Notes, bonds and Participations in Notes, bonds and Equities, shares Debt securities assets buildings affiliated receivables in entities with receivables in and other and other entreprises affiliated which there is a entities with variable income fixed income entreprises participation link which there is a securities securities participation link 1 2 3 4 5 6 7 8 a) ACQUISITION VALUES During the previous financial year 08.01.01 15,341,933 0 6,436,159,584 826,222,351 1,739,814 0 54,077,627 582,131,782 Changes during the financial year: (133,987) 0 0 31,511,018 (1,709,887) 65,488,301 4,649,234 76,348,613 - Acquired 8.01.021 445,085 0 0 31,511,018 0 65,488,301 4,649,234 95,000,292 - New start-up costs incurred 8.01.022 0 0 0 0 0 0 0 0 - Disposals and withdrawals (-) 8.01.023 0 0 0 0 0 0 0 (12,207,816) - Transfers to another category (+)(-) 8.01.024 0 0 0 0 0 0 0 0 - Other changes (+)(-) 8.01.025 (579,071) 0 0 0 (1,709,887) 0 0 (6,443,863) During the financial year 08.01.03 15,207,946 0 6,436,159,584 857,733,369 29,927 65,488,301 58,726,861 658,480,395 b) CAPITAL GAINS During the previous financial year 08.01.04 0 0 0 0 0 0 0 0 Changes during the financial year: 0 0 0 0 0 0 0 0 - Recognised 8.01.051 0 0 0 0 0 0 0 0 - Acquired from third parties 8.01.052 0 0 0 0 0 0 0 0 - Cancelled (-) 8.01.053 0 0 0 0 0 0 0 0 - Transfers to another category (+)(-) 8.01.054 0 0 0 0 0 0 0 0 During the financial year 08.01.06 0 0 0 0 0 0 0 0 c) DEPRECIATION AND IMPAIRMENTS During the previous financial year 08.01.07 2,613,399 0 0 0 0 0 0 0 Changes during the financial year: 899,303 0 0 0 0 0 0 0 - Recognised 8.01.081 1,478,374 0 0 0 0 0 0 0 - Reversed as excess (-) 8.01.082 0 0 0 0 0 0 0 0 - Acquired from third parties 8.01.083 0 0 0 0 0 0 0 0 - Cancelled (-) 8.01.084 0 0 0 0 0 0 0 0 - Transfers to another category (+)(-) 8.01.085 (579,071) 0 0 0 0 0 0 0 During the financial year 08.01.09 3,512,702 0 0 0 0 0 0 0 d) AMOUNTS NOT CALLED (Art. 29, § 1.) During the previous financial year 08.01.10 0 0 0 0 0 0 0 0 Changes during the financial year: (+)(-) 08.01.11 0 0 0 0 0 0 0 0 During the financial year 08.01.12 0 0 0 0 0 0 0 0 e) CURRENCY CONVERSION SPREADS During the previous financial year (+)(-) 08.01.13 0 0 0 0 0 0 0 0 Changes during the financial year: (+)(-) 08.01.14 0 0 0 0 0 0 0 0 During the financial year (+)(-) 08.01.15 0 0 0 0 0 0 0 0 NET CARRYING AMOUNT AT THE END OF THE FINANCIAL YEAR (a) + (b) - (c) - (d) +/- (e) 08.01.16 11,695,245 0 6,436,159,584 857,733,369 29,927 65,488,301 58,726,861 658,480,395 281 | 240 No. 2. Statement of participations and social rights held in other companies The following are the companies in which the company has a participation within the meaning of the Royal Decree of 17 November 1994 (included in items C.II.1., C.II.3., D.II.1. and D.II.3. under assets) as well as other entities in which the company holds social rights (included in items C.III.1. and D.III.1. under assets) representing at least 10% of the subscribed capital. Social rights held Data from the latest available annual accounts NAME, full address of the HEADQUARTERS by the and for the companies under Belgian law, directly subsidiaries Annual Monetary Equity Net result VAT NUMBER or NATIONAL NUMBER. accounts unit () closed at (+) of (-) Figures % % (in thousands of monetary units) () as per official coding. Royal Park Investments NV Markiesstraat 1 B - 1000 Brussel NN 0807.882.811 3,800,000 45 0 31/12/2020 EUR 5,143 2,903 Ageas Insurance International NV Markiesstraat 1 B - 1000 Brussel NN 0718.677.849 792,001,700 100 0 31/12/2020 EUR 5,981,008 931,050 AGEAS SA/NV STATUTORY ACCOUNTS 2021 280 Ageas Annual Report 2021 280 | 240 No. 1. Statement of intangible assets, investment property and investment securities Asset items Asset items Asset items concerned concerned concerned B. C.I. C.II.1. C.II.2. C.II.3. C.II.4. C.III.1. C.III.2. Names Codes Intangible Land and Participations in Notes, bonds and Participations in Notes, bonds and Equities, shares Debt securities assets buildings affiliated receivables in entities with receivables in and other and other entreprises affiliated which there is a entities with variable income fixed income entreprises participation link which there is a securities securities participation link 1 2 3 4 5 6 7 8 a) ACQUISITION VALUES During the previous financial year 08.01.01 15,341,933 0 6,436,159,584 826,222,351 1,739,814 0 54,077,627 582,131,782 Changes during the financial year: (133,987) 0 0 31,511,018 (1,709,887) 65,488,301 4,649,234 76,348,613 - Acquired 8.01.021 445,085 0 0 31,511,018 0 65,488,301 4,649,234 95,000,292 - New start-up costs incurred 8.01.022 0 0 0 0 0 0 0 0 - Disposals and withdrawals (-) 8.01.023 0 0 0 0 0 0 0 (12,207,816) - Transfers to another category (+)(-) 8.01.024 0 0 0 0 0 0 0 0 - Other changes (+)(-) 8.01.025 (579,071) 0 0 0 (1,709,887) 0 0 (6,443,863) During the financial year 08.01.03 15,207,946 0 6,436,159,584 857,733,369 29,927 65,488,301 58,726,861 658,480,395 b) CAPITAL GAINS During the previous financial year 08.01.04 0 0 0 0 0 0 0 0 Changes during the financial year: 0 0 0 0 0 0 0 0 - Recognised 8.01.051 0 0 0 0 0 0 0 0 - Acquired from third parties 8.01.052 0 0 0 0 0 0 0 0 - Cancelled (-) 8.01.053 0 0 0 0 0 0 0 0 - Transfers to another category (+)(-) 8.01.054 0 0 0 0 0 0 0 0 During the financial year 08.01.06 0 0 0 0 0 0 0 0 c) DEPRECIATION AND IMPAIRMENTS During the previous financial year 08.01.07 2,613,399 0 0 0 0 0 0 0 Changes during the financial year: 899,303 0 0 0 0 0 0 0 - Recognised 8.01.081 1,478,374 0 0 0 0 0 0 0 - Reversed as excess (-) 8.01.082 0 0 0 0 0 0 0 0 - Acquired from third parties 8.01.083 0 0 0 0 0 0 0 0 - Cancelled (-) 8.01.084 0 0 0 0 0 0 0 0 - Transfers to another category (+)(-) 8.01.085 (579,071) 0 0 0 0 0 0 0 During the financial year 08.01.09 3,512,702 0 0 0 0 0 0 0 d) AMOUNTS NOT CALLED (Art. 29, § 1.) During the previous financial year 08.01.10 0 0 0 0 0 0 0 0 Changes during the financial year: (+)(-) 08.01.11 0 0 0 0 0 0 0 0 During the financial year 08.01.12 0 0 0 0 0 0 0 0 e) CURRENCY CONVERSION SPREADS During the previous financial year (+)(-) 08.01.13 0 0 0 0 0 0 0 0 Changes during the financial year: (+)(-) 08.01.14 0 0 0 0 0 0 0 0 During the financial year (+)(-) 08.01.15 0 0 0 0 0 0 0 0 NET CARRYING AMOUNT AT THE END OF THE FINANCIAL YEAR (a) + (b) - (c) - (d) +/- (e) 08.01.16 11,695,245 0 6,436,159,584 857,733,369 29,927 65,488,301 58,726,861 658,480,395 281 | 240 No. 2. Statement of participations and social rights held in other companies The following are the companies in which the company has a participation within the meaning of the Royal Decree of 17 November 1994 (included in items C.II.1., C.II.3., D.II.1. and D.II.3. under assets) as well as other entities in which the company holds social rights (included in items C.III.1. and D.III.1. under assets) representing at least 10% of the subscribed capital. Social rights held Data from the latest available annual accounts NAME, full address of the HEADQUARTERS by the and for the companies under Belgian law, directly subsidiaries Annual Monetary Equity Net result VAT NUMBER or NATIONAL NUMBER. accounts unit () closed at (+) of (-) Figures % % (in thousands of monetary units) () as per official coding. Royal Park Investments NV Markiesstraat 1 B - 1000 Brussel NN 0807.882.811 3,800,000 45 0 31/12/2020 EUR 5,143 2,903 Ageas Insurance International NV Markiesstraat 1 B - 1000 Brussel NN 0718.677.849 792,001,700 100 0 31/12/2020 EUR 5,981,008 931,050 281 Ageas Annual Report 2021 282 | 240 No. 3. Present value of investments (art. 38) Asset items Codes Amounts C. Investments 08.03 9,279,728,564 I. Land and buildings 8.03.221 0 II. Investments in affiliated enterprises and participations 8.03.222 7,436,625,253 - Affiliated enterprises 8.03.222.1 7,371,989,355 1. Participating interests 8.03.222.11 6,436,159,584 2. Notes. bonds and receivables 8.03.222.12 935,829,771 - Undertakings linked by virtue of a participating interest 8.03.222.2 64,635,898 3. Participating interests 8.03.222.21 32,906 4. Notes. bonds and receivables 8.03.222.22 64,602,992 III. Other financial investments 8.03.223 966,915,531 1. Equities, shares and other variable income securities 8.03.223.1 62,027,018 2. Debt securities and other fixed income securities 8.03.223.2 663.703.528 3. Participating in investment pools 8.03.223.3 0 4. Loans and mortgages 8.03.223.4 0 5. Other loans 8.03.223.5 0 6. Deposits with credit institutions 8.03.223.6 270,007,011 7. Other 8.03.223.7 0 IV. Deposits with ceding undertakings 8.03.224 876,187,780 283 | 240 No. 3bis Information concerning the non-usage of the fair value measurement method A. Estimation of fair value for each class of derivative financial Net book value Fair value instruments not measured based on fair value, stating the size, nature and hedged risk of the instruments B. For the financial fixed assets listed under headings C.II. and C.III. which are Net book value Fair value taken into account at an amount higher than their fair value: the net book value and the fair value of the individual assets or of appropriate groups of these individual assets. C.III.I Equities, shares and other variable income securities 17,546,000 16,813,279 C.III.2 Debt securities and other fixed income securities 200,923,155 196,572,250 For each of the financial fixed assets referred to in B., or the appropriate groups of such individual assets referred to in B., which are taken into account at an amount higher than their fair value, the reasons why the book value has not been reduced must also be stated below, together with the nature of the indications underlying the assumption that the book value will be recoverable: C.III.I Equities, shares and other variable income securities: see valuation rules in statement No. 20 Valuation rules C.III.2 Debt securities and other fixed income securities: see valuation rules in statement No. 20 Valuation rules No. 4 Statement relating to other accruals and deferrals Amounts Breakdown of asset item G.III if it represents a significant amount. Deferred charges 4,797,299 AGEAS SA/NV STATUTORY ACCOUNTS 2021 282 Ageas Annual Report 2021 282 | 240 No. 3. Present value of investments (art. 38) Asset items Codes Amounts C. Investments 08.03 9,279,728,564 I. Land and buildings 8.03.221 0 II. Investments in affiliated enterprises and participations 8.03.222 7,436,625,253 - Affiliated enterprises 8.03.222.1 7,371,989,355 1. Participating interests 8.03.222.11 6,436,159,584 2. Notes. bonds and receivables 8.03.222.12 935,829,771 - Undertakings linked by virtue of a participating interest 8.03.222.2 64,635,898 3. Participating interests 8.03.222.21 32,906 4. Notes. bonds and receivables 8.03.222.22 64,602,992 III. Other financial investments 8.03.223 966,915,531 1. Equities, shares and other variable income securities 8.03.223.1 62,027,018 2. Debt securities and other fixed income securities 8.03.223.2 663.703.528 3. Participating in investment pools 8.03.223.3 0 4. Loans and mortgages 8.03.223.4 0 5. Other loans 8.03.223.5 0 6. Deposits with credit institutions 8.03.223.6 270,007,011 7. Other 8.03.223.7 0 IV. Deposits with ceding undertakings 8.03.224 876,187,780 283 | 240 No. 3bis Information concerning the non-usage of the fair value measurement method A. Estimation of fair value for each class of derivative financial Net book value Fair value instruments not measured based on fair value, stating the size, nature and hedged risk of the instruments B. For the financial fixed assets listed under headings C.II. and C.III. which are Net book value Fair value taken into account at an amount higher than their fair value: the net book value and the fair value of the individual assets or of appropriate groups of these individual assets. C.III.I Equities, shares and other variable income securities 17,546,000 16,813,279 C.III.2 Debt securities and other fixed income securities 200,923,155 196,572,250 For each of the financial fixed assets referred to in B., or the appropriate groups of such individual assets referred to in B., which are taken into account at an amount higher than their fair value, the reasons why the book value has not been reduced must also be stated below, together with the nature of the indications underlying the assumption that the book value will be recoverable: C.III.I Equities, shares and other variable income securities: see valuation rules in statement No. 20 Valuation rules C.III.2 Debt securities and other fixed income securities: see valuation rules in statement No. 20 Valuation rules No. 4 Statement relating to other accruals and deferrals Amounts Breakdown of asset item G.III if it represents a significant amount. Deferred charges 4,797,299 283 Ageas Annual Report 2021 284 | 240 No. 5. Specifications of equity Codes Amounts Number of shares A. SHARE CAPITAL 1. Subscribed capital (liability item A.I.1.) - During the previous financial year 8.05.111.101 1,502,364,273 xxxxxxxxxxxxxxxxxxxxxxx - Changes during the year 8.05.111.103 - During the financial year 8.05.111.102 1,502,364,273 xxxxxxxxxxxxxxxxxxxxxxx 2. Presentation of capital 2.1. Share classes under company law 8.05.1.20 1,502,364,273 191,033,128 2.2. Registered or dematerialised shares Registered 8.05.1.21 xxxxxxxxxxxxxxxxxxxxxxx 9,982,383 Dematerialised 8.05.1.22 xxxxxxxxxxxxxxxxxxxxxxx 181,050,745 Uncalled amount Called amount Codes (liability item A.I.2.) (asset item E.I.V.) B. UNPAID CAPITAL (art.51 - C.L.C.C.) Shareholders liable for payment 8.05.3 TOTAL 8.05.2 No. 5. Specifications of equity (cont.) Codes Amount of share capital held Corresponding number of shares C. COMPANY SHARES held by - the company itself 8.05.3.1 197,027,253 4,051,147 - its subsidiaries 8.05.3.2 21,487,178 1,244,518 D. SHARE ISSUANCE OBLIGATIONS 1. Following the exercise of CONVERSION rights - Amount of convertible loans outstanding 8.05.4.1 - Amount of share capital to be subscribed 8.05.4.2 - Corresponding maximum number of shares to be issued 8.05.4.3 2. Following the exercise of SUBSCRIPTION rights - Number of subscription rights outstanding 8.05.4.4 - Amount of share capital to be subscribed 8.05.4.5 - Corresponding maximum number of shares to be issued 8.05.4.6 3. Following payment of dividends in shares - Amount of share capital to be subscribed 8.05.4.7 - Corresponding maximum number of shares to be issued 8.05.4.8 285 | 240 No. 5. Specifications of equity (cont.) Codes Amount E. AUTHORISED CAPITAL NOT SUBSCRIBED 8.05.5 148,000,000 Number of votes Codes Number of shares attached to it F. NON-REPRESENTATIVE CAPITAL SHARES 8.05.6 of which: - held by the company itself 8.05.6.1 - held by subsidiaries 8.05.6.2 No. 5. Specifications of equity (cont. and end) G. THE SHAREHOLDER STRUCTURE OF THE COMPANY AT THE BALANCE SHEET DATE IS BROKEN DOWN AS FOLLOWS:  shareholder structure of the company at the balance sheet date, as evidenced by the notifications received by the company pursuant to Article 631, §2, last paragraph, and Article 632, §2, last paragraph, of the Belgian companies code:  shareholder structure of the company at the balance sheet date, as evidenced by the notifications received by the company pursuant to Article 14, fourth paragraph, of the Act of 2 May 2007 on the disclosure of major shareholdings or pursuant to Article 5 of the Royal Decree of 21 August 2008 on more detailed rules regarding certain multilateral trading facilities: Main shareholders (above the statutory threshold of 3%) on 31/12/2021  Fosun 10.01%  BlackRock Inc. 5.23%  Ping An 5.17%  Schroders Plc 3,02% On 31 December 2021 the members of the Board of ageas SA/NV jointly held 104,562 shares of ageas SA/NV. No. 6. Statement of provisions for other risks and charges - other provisions Amounts Breakdown of liability item E.III if it represents a significant amount. Provision Fortis settlement 114,375,225 Provision RPN(I) 520,400,000 AGEAS SA/NV STATUTORY ACCOUNTS 2021 284 Ageas Annual Report 2021 284 | 240 No. 5. Specifications of equity Codes Amounts Number of shares A. SHARE CAPITAL 1. Subscribed capital (liability item A.I.1.) - During the previous financial year 8.05.111.101 1,502,364,273 xxxxxxxxxxxxxxxxxxxxxxx - Changes during the year 8.05.111.103 - During the financial year 8.05.111.102 1,502,364,273 xxxxxxxxxxxxxxxxxxxxxxx 2. Presentation of capital 2.1. Share classes under company law 8.05.1.20 1,502,364,273 191,033,128 2.2. Registered or dematerialised shares Registered 8.05.1.21 xxxxxxxxxxxxxxxxxxxxxxx 9,982,383 Dematerialised 8.05.1.22 xxxxxxxxxxxxxxxxxxxxxxx 181,050,745 Uncalled amount Called amount Codes (liability item A.I.2.) (asset item E.I.V.) B. UNPAID CAPITAL (art.51 - C.L.C.C.) Shareholders liable for payment 8.05.3 TOTAL 8.05.2 No. 5. Specifications of equity (cont.) Codes Amount of share capital held Corresponding number of shares C. COMPANY SHARES held by - the company itself 8.05.3.1 197,027,253 4,051,147 - its subsidiaries 8.05.3.2 21,487,178 1,244,518 D. SHARE ISSUANCE OBLIGATIONS 1. Following the exercise of CONVERSION rights - Amount of convertible loans outstanding 8.05.4.1 - Amount of share capital to be subscribed 8.05.4.2 - Corresponding maximum number of shares to be issued 8.05.4.3 2. Following the exercise of SUBSCRIPTION rights - Number of subscription rights outstanding 8.05.4.4 - Amount of share capital to be subscribed 8.05.4.5 - Corresponding maximum number of shares to be issued 8.05.4.6 3. Following payment of dividends in shares - Amount of share capital to be subscribed 8.05.4.7 - Corresponding maximum number of shares to be issued 8.05.4.8 285 | 240 No. 5. Specifications of equity (cont.) Codes Amount E. AUTHORISED CAPITAL NOT SUBSCRIBED 8.05.5 148,000,000 Number of votes Codes Number of shares attached to it F. NON-REPRESENTATIVE CAPITAL SHARES 8.05.6 of which: - held by the company itself 8.05.6.1 - held by subsidiaries 8.05.6.2 No. 5. Specifications of equity (cont. and end) G. THE SHAREHOLDER STRUCTURE OF THE COMPANY AT THE BALANCE SHEET DATE IS BROKEN DOWN AS FOLLOWS:  shareholder structure of the company at the balance sheet date, as evidenced by the notifications received by the company pursuant to Article 631, §2, last paragraph, and Article 632, §2, last paragraph, of the Belgian companies code:  shareholder structure of the company at the balance sheet date, as evidenced by the notifications received by the company pursuant to Article 14, fourth paragraph, of the Act of 2 May 2007 on the disclosure of major shareholdings or pursuant to Article 5 of the Royal Decree of 21 August 2008 on more detailed rules regarding certain multilateral trading facilities: Main shareholders (above the statutory threshold of 3%) on 31/12/2021  Fosun 10.01%  BlackRock Inc. 5.23%  Ping An 5.17%  Schroders Plc 3,02% On 31 December 2021 the members of the Board of ageas SA/NV jointly held 104,562 shares of ageas SA/NV. No. 6. Statement of provisions for other risks and charges - other provisions Amounts Breakdown of liability item E.III if it represents a significant amount. Provision Fortis settlement 114,375,225 Provision RPN(I) 520,400,000 285 Ageas Annual Report 2021 286 | 240 No. 7. Statement of technical provisions and liabilities a) Breakdown of amounts payable (or part of amounts payable) with a residual maturity of more than 5 years. Liability items concerned Codes Amounts B. Subordinated liabilities 8.07.1.12 1,745,427,640 I. Convertible bonds 8.07.1.121 II. Non-convertible bonds 8.07.1.122 1,745,427,640 G. Debts 8.07.1.42 I. Payables from direct insurance operations 8.07.1.421 II. Reinsurance payables 8.07.1.422 III. Unsubordinated bonds 8.07.1.423 1. Convertible bonds 8.07.1.423.1 2. Non-convertible bonds 8.07.1.423.2 IV. Amounts payable to credit institutions 8.07.1.424 V. Other amounts payable 8.07.1.425 TOTAL 8.07.1.5 1,745,427,640 No. 7. Statement of technical provisions and liabilities (cont.) (b) amounts payable (or part of the amounts payable) and technical provisions (or part of the technical provisions) guaranteed by real or irrevocably promised collateral against the assets of the entity. Liability items concerned Codes Amounts B. Subordinated liabilities 8.07.2.12 I. Convertible bonds 8.07.2.121 II. Non-convertible bonds 8.07.2.122 C. Technical provisions 8.07.2.14 601,545,886 D. Technical provisions related to investment fund operations of the life' activities group when the risk of investment is not borne by the company 8.07.2.15 G. Debts 8.07.2.42 I. Payables from direct insurance operations 8.07.2.421 II. Reinsurance payables 8.07.2.422 III. Unsubordinated bonds 8.07.2.423 1. Convertible bonds 8.07.2.423.1 2. Non-convertible bonds 8.07.2.423.2 IV. Amounts payable to credit institutions 8.07.2.424 V. Other amounts payable 8.07.2.425 - tax, salary and social liabilities 8.07.2.425.1 a) taxes 8.07.2.425.11 b) remuneration and social charges 8.07.2.425.12 - finance lease and similar amounts payable 8.07.2.425.26 - other 8.07.2.425.3 TOTAL 8.07.2.5 601,545,886 287 | 240 No. 7. Statement of technical provisions and liabilities (cont. and end) c) tax, salary and social liabilities Liability items concerned Codes Amounts 1. Taxes (liability item G.V.1.a) a) tax liabilities - overdue 8.07.3.425.11.1 b) tax liabilities – not overdue 8.07.3.425.11.2 25,621 2. Remuneration and social security charges (liability item G.V.1.b) a) Amounts due to the National Social Security Office 8.07.3.425.12.1 b) Other salaries and social liabilities 8.07.3.425.12.2 6,090,826 No. 8. Statement of the composition of accruals and deferred income under liabilities Amounts Breakdown of liability item H if it represents a significant amount. Accrued charges – Share plans 5,328,241 Accrued charges – Other 4,386,577 Accrued charges – Foundations 1,093,230 Accrued charges – Interests 25,834,155 36,642,202 No. 9. Assets and liabilities relating to the management on own account for the benefit of third parties of collective pension funds (art. 40) Asset items and sub-items concerned () Current period Liability items and sub-items concerned () Current period TOTAL TOTAL () with figures and letters relating to the wording of the item or sub-item concerned in the balance sheet (example : C.III.2. obligations and other fixed income securities). AGEAS SA/NV STATUTORY ACCOUNTS 2021 286 Ageas Annual Report 2021 286 | 240 No. 7. Statement of technical provisions and liabilities a) Breakdown of amounts payable (or part of amounts payable) with a residual maturity of more than 5 years. Liability items concerned Codes Amounts B. Subordinated liabilities 8.07.1.12 1,745,427,640 I. Convertible bonds 8.07.1.121 II. Non-convertible bonds 8.07.1.122 1,745,427,640 G. Debts 8.07.1.42 I. Payables from direct insurance operations 8.07.1.421 II. Reinsurance payables 8.07.1.422 III. Unsubordinated bonds 8.07.1.423 1. Convertible bonds 8.07.1.423.1 2. Non-convertible bonds 8.07.1.423.2 IV. Amounts payable to credit institutions 8.07.1.424 V. Other amounts payable 8.07.1.425 TOTAL 8.07.1.5 1,745,427,640 No. 7. Statement of technical provisions and liabilities (cont.) (b) amounts payable (or part of the amounts payable) and technical provisions (or part of the technical provisions) guaranteed by real or irrevocably promised collateral against the assets of the entity. Liability items concerned Codes Amounts B. Subordinated liabilities 8.07.2.12 I. Convertible bonds 8.07.2.121 II. Non-convertible bonds 8.07.2.122 C. Technical provisions 8.07.2.14 601,545,886 D. Technical provisions related to investment fund operations of the life' activities group when the risk of investment is not borne by the company 8.07.2.15 G. Debts 8.07.2.42 I. Payables from direct insurance operations 8.07.2.421 II. Reinsurance payables 8.07.2.422 III. Unsubordinated bonds 8.07.2.423 1. Convertible bonds 8.07.2.423.1 2. Non-convertible bonds 8.07.2.423.2 IV. Amounts payable to credit institutions 8.07.2.424 V. Other amounts payable 8.07.2.425 - tax, salary and social liabilities 8.07.2.425.1 a) taxes 8.07.2.425.11 b) remuneration and social charges 8.07.2.425.12 - finance lease and similar amounts payable 8.07.2.425.26 - other 8.07.2.425.3 TOTAL 8.07.2.5 601,545,886 287 | 240 No. 7. Statement of technical provisions and liabilities (cont. and end) c) tax, salary and social liabilities Liability items concerned Codes Amounts 1. Taxes (liability item G.V.1.a) a) tax liabilities - overdue 8.07.3.425.11.1 b) tax liabilities – not overdue 8.07.3.425.11.2 25,621 2. Remuneration and social security charges (liability item G.V.1.b) a) Amounts due to the National Social Security Office 8.07.3.425.12.1 b) Other salaries and social liabilities 8.07.3.425.12.2 6,090,826 No. 8. Statement of the composition of accruals and deferred income under liabilities Amounts Breakdown of liability item H if it represents a significant amount. Accrued charges – Share plans 5,328,241 Accrued charges – Other 4,386,577 Accrued charges – Foundations 1,093,230 Accrued charges – Interests 25,834,155 36,642,202 No. 9. Assets and liabilities relating to the management on own account for the benefit of third parties of collective pension funds (art. 40) Asset items and sub-items concerned () Current period Liability items and sub-items concerned () Current period TOTAL TOTAL () with figures and letters relating to the wording of the item or sub-item concerned in the balance sheet (example : C.III.2. obligations and other fixed income securities). 287 Ageas Annual Report 2021 288 | 240 No. 10. Information concerning the technical accounts I. Non-life insurance Name Codes Total DIRECT DIRECT DIRECT BUSINESS BUSINESS BUSINESS BUSINESS ACCEPTED Tot. Accident Motor, Motor Marine Fire General Credit Miscel- Legal Assis- & Health Third Other Aviation and other Third and laneous protect- tance Party lines Transport damage Party Security pecuniary ion liability to property Liability losses lines line 10 lines lines lines line 13 lines 1 line 16 line 17 line 18 1 and 2 3 and 7 4, 5, 6, 7, 8 and 9 4 and 15 11 and 12 0 1 2 3 4 5 6 7 8 9 10 11 12 Gross premiums 8.10.01.710.1 1,512,236,974 1,512,236,974 Gross earned premiums 8.10.02 1,496,722,833 1,496,722,833 Gross cost of claims 8.10.03 893,894,346 893,894,346 Gross operating expense 8.10.04 555,265,512 555,265,512 Reinsurance balance 8.10.05 (40,887,374) (40,887,374) Commissions (art. 37) 8.10.06 II. Life Insurance Name Codes Amounts A. Direct business 1) Gross premiums: 8.10.07.720.1 0 a) 1. Individual premiums: 08.10.08 0 2. Premiums for group contracts: 08.10.09 0 b) 1. Periodic premiums: 08.10.10 0 2. Single premiums: 08.10.11 0 c) 1. Premiums from non profit-sharing contracts: 08.10.12 0 2. Premiums from profit-sharing contracts: 08.10.13 0 3. Contract premiums when the risk of investment is not borne by the company 08.10.14 0 2) Reinsurance balance 08.10.15 0 3) Commissions (art. 37) 08.10.16 0 B. Business accepted Gross premiums: 8.10.17.720.1 44,245,200 II. Non-life and life insurance, direct business Gross premiums: - in Belgium 08.10.18 - in other EEC countries: 08.10.19 - in other countries: 08.10.20 289 | 240 No. 11. Statement on number of employees As regards to staff: A. The following data for the financial year and for the previous financial year relating to the employees recorded in the personnel register and linked to the company by an employment contract or a starter's job contract Current Previous Description Codes period period a) the total number on the closing date of the financial year 8.11.10 162 157 b) the average number of employees employed by the company during the financial year and the previous financial year, calculated in full-time equivalents in accordance with Article 15, § 4 of the Companies Code, and broken down into the following categories 8.11.11 161 149 - Management staff 8.11.11.1 - Employees 8.11.11.2 161 149 - Workers 8.11.11.3 - Other 8.11.11.4 c) the numbers of hours worked 8.11.12 234,318 225,263 B. The following data for the financial year and for the previous financial year relating to temporary workers and the persons placed at the disposal of the company Current Previous Description Codes period period a) the total number on the closing date of the financial year 8.11.20 0 0 b) the average number in full-time equivalents calculated in a similar way as the employees recorded in the personnel register 8.11.21 0 0 c) the numbers of hours worked 8.11.22 406 187 AGEAS SA/NV STATUTORY ACCOUNTS 2021 288 Ageas Annual Report 2021 288 | 240 No. 10. Information concerning the technical accounts I. Non-life insurance Name Codes Total DIRECT DIRECT DIRECT BUSINESS BUSINESS BUSINESS BUSINESS ACCEPTED Tot. Accident Motor, Motor Marine Fire General Credit Miscel- Legal Assis- & Health Third Other Aviation and other Third and laneous protect- tance Party lines Transport damage Party Security pecuniary ion liability to property Liability losses lines line 10 lines lines lines line 13 lines 1 line 16 line 17 line 18 1 and 2 3 and 7 4, 5, 6, 7, 8 and 9 4 and 15 11 and 12 0 1 2 3 4 5 6 7 8 9 10 11 12 Gross premiums 8.10.01.710.1 1,512,236,974 1,512,236,974 Gross earned premiums 8.10.02 1,496,722,833 1,496,722,833 Gross cost of claims 8.10.03 893,894,346 893,894,346 Gross operating expense 8.10.04 555,265,512 555,265,512 Reinsurance balance 8.10.05 (40,887,374) (40,887,374) Commissions (art. 37) 8.10.06 II. Life Insurance Name Codes Amounts A. Direct business 1) Gross premiums: 8.10.07.720.1 0 a) 1. Individual premiums: 08.10.08 0 2. Premiums for group contracts: 08.10.09 0 b) 1. Periodic premiums: 08.10.10 0 2. Single premiums: 08.10.11 0 c) 1. Premiums from non profit-sharing contracts: 08.10.12 0 2. Premiums from profit-sharing contracts: 08.10.13 0 3. Contract premiums when the risk of investment is not borne by the company 08.10.14 0 2) Reinsurance balance 08.10.15 0 3) Commissions (art. 37) 08.10.16 0 B. Business accepted Gross premiums: 8.10.17.720.1 44,245,200 II. Non-life and life insurance, direct business Gross premiums: - in Belgium 08.10.18 - in other EEC countries: 08.10.19 - in other countries: 08.10.20 289 | 240 No. 11. Statement on number of employees As regards to staff: A. The following data for the financial year and for the previous financial year relating to the employees recorded in the personnel register and linked to the company by an employment contract or a starter's job contract Current Previous Description Codes period period a) the total number on the closing date of the financial year 8.11.10 162 157 b) the average number of employees employed by the company during the financial year and the previous financial year, calculated in full-time equivalents in accordance with Article 15, § 4 of the Companies Code, and broken down into the following categories 8.11.11 161 149 - Management staff 8.11.11.1 - Employees 8.11.11.2 161 149 - Workers 8.11.11.3 - Other 8.11.11.4 c) the numbers of hours worked 8.11.12 234,318 225,263 B. The following data for the financial year and for the previous financial year relating to temporary workers and the persons placed at the disposal of the company Current Previous Description Codes period period a) the total number on the closing date of the financial year 8.11.20 0 0 b) the average number in full-time equivalents calculated in a similar way as the employees recorded in the personnel register 8.11.21 0 0 c) the numbers of hours worked 8.11.22 406 187 289 Ageas Annual Report 2021 290 | 240 No.12. Statement relating to all administrative and management costs, broken down by type (An asterisk () to the right of the wording of an item or sub-item indicates that there is a definition or explanatory note in Chapter III of the Annex to the Decree) Names Codes Amounts I. Staff expenses 8.12.1 1,615,406 1. a) Remuneration 8.12.111 1,615,406 b) Pensions 8.12.112 0 c) Other direct social benefits 8.12.113 0 2. Employer social insurance contributions 8.12.12 0 3. Allowances and employer's premiums for non-statutory insurance 8.12.13 0 4. Other staff expenses 8.12.14 0 5. Provisions for pensions, salaries and social security contributions 8.12.15 0 a) Provisions (+) 8.12.15.1 0 b) Uses and reversals (-) 8.12.15.2 0 6. Temporary staff or individuals made available to the company 8.12.16] 0 II. Miscellaneous goods and services 8.12.2 1,630,303 III. Depreciation and amounts written down on intangible assets and property, plant and equipment other than investments 8.12.3 0 IV. Provisions for other risks and charges 8.12.4 0 1. Provisions (+) 8.12.41 0 2. Uses and reversals (-) 8.12.42 0 V. Other current expenses 8.12.5 725,263 1. Operating tax expense 8.12.51 0 a) Property withholding tax 8.12.511 0 b) Other 8.12.512 0 2. Contributions to public institutions 8.12.52 0 3. Theoretical expenses 8.12.53 0 4. Other 8.12.54 725,263 VI. Administrative expenses recovered and other current income (-) 8.12.6 0 1. Administrative expenses recovered 8.12.61 0 a) Fees received for collective pension fund management services on behalf of third parties 8.12.611 0 b) Other 8.12.612 0 2. Other current income 8.12.62 0 TOTAL 8.12.7 4,390,399 As amended by Article 10, § 2 of the Royal Decree of 4 August 1996. 291 | 240 No. 13. Other income, other expenses Amounts A. Breakdown of OTHER INCOME (item 7. of the non-technical account), if material. 39,221,928 Re-invoicing staff expenses 8,274,087 Change provision Fortis Settlement 12,863,275 Positive exchange rate results 17,714,562 Other 370,004 B. Breakdown of OTHER EXPENSES (item 8. of the non-technical account), if material. 192,362,473 Provision compensation RPN(I) 100,600,000 Services & goods 53,258,760 Staff expenses 30,093,514 Depreciations 424,265 Costs related to foundations 7,476,737 Other 509,197 No. 14. Extraordinary results Amounts A. Breakdown of EXTRAORDINARY INCOME (item 11. of the non-technical account), if material. B. Breakdown of EXTRAORDINARY EXPENSES (item 12. of the non-technical account), if material. AGEAS SA/NV STATUTORY ACCOUNTS 2021 290 Ageas Annual Report 2021 290 | 240 No.12. Statement relating to all administrative and management costs, broken down by type (An asterisk () to the right of the wording of an item or sub-item indicates that there is a definition or explanatory note in Chapter III of the Annex to the Decree) Names Codes Amounts I. Staff expenses 8.12.1 1,615,406 1. a) Remuneration 8.12.111 1,615,406 b) Pensions 8.12.112 0 c) Other direct social benefits 8.12.113 0 2. Employer social insurance contributions 8.12.12 0 3. Allowances and employer's premiums for non-statutory insurance 8.12.13 0 4. Other staff expenses 8.12.14 0 5. Provisions for pensions, salaries and social security contributions 8.12.15 0 a) Provisions (+) 8.12.15.1 0 b) Uses and reversals (-) 8.12.15.2 0 6. Temporary staff or individuals made available to the company 8.12.16] 0 II. Miscellaneous goods and services 8.12.2 1,630,303 III. Depreciation and amounts written down on intangible assets and property, plant and equipment other than investments 8.12.3 0 IV. Provisions for other risks and charges 8.12.4 0 1. Provisions (+) 8.12.41 0 2. Uses and reversals (-) 8.12.42 0 V. Other current expenses 8.12.5 725,263 1. Operating tax expense 8.12.51 0 a) Property withholding tax 8.12.511 0 b) Other 8.12.512 0 2. Contributions to public institutions 8.12.52 0 3. Theoretical expenses 8.12.53 0 4. Other 8.12.54 725,263 VI. Administrative expenses recovered and other current income (-) 8.12.6 0 1. Administrative expenses recovered 8.12.61 0 a) Fees received for collective pension fund management services on behalf of third parties 8.12.611 0 b) Other 8.12.612 0 2. Other current income 8.12.62 0 TOTAL 8.12.7 4,390,399 As amended by Article 10, § 2 of the Royal Decree of 4 August 1996. 291 | 240 No. 13. Other income, other expenses Amounts A. Breakdown of OTHER INCOME (item 7. of the non-technical account), if material. 39,221,928 Re-invoicing staff expenses 8,274,087 Change provision Fortis Settlement 12,863,275 Positive exchange rate results 17,714,562 Other 370,004 B. Breakdown of OTHER EXPENSES (item 8. of the non-technical account), if material. 192,362,473 Provision compensation RPN(I) 100,600,000 Services & goods 53,258,760 Staff expenses 30,093,514 Depreciations 424,265 Costs related to foundations 7,476,737 Other 509,197 No. 14. Extraordinary results Amounts A. Breakdown of EXTRAORDINARY INCOME (item 11. of the non-technical account), if material. B. Breakdown of EXTRAORDINARY EXPENSES (item 12. of the non-technical account), if material. 291 Ageas Annual Report 2021 292 | 240 No. 15. Taxes on income Codes Amounts A. ITEM 15 a) 'Taxes': 8.15.1.634 72,858 1. Tax on income for the financial year 8.15.1.634.1 a. Advance payments and refundable prepayments 8.15.1.634.11 b. Other attributable assets 8.15.1.634.12 c. Excess of advance payments and/or refundable prepayments recorded as assets (-) 8.15.1.634.13 d. Estimated additional taxes (included in liability item G.V.1.a) 8.15.1.634.14 2. Tax on income for previous financial years 8.15.1.634.2 72,858 a) Additional taxes due or paid: 8.15.1.634.21 72,858 b) Estimated additional taxes (included in liability item G.V.1.a) or provisioned (included in liability item E.II.2.) 8.15.1.634.22 B. PRINCIPAL SOURCES OF DISPARITIES BETWEEN PRE-TAX PROFIT, expressed in the accounts AND THE ESTIMATED TAXABLE PROFIT, with particular reference to those arising from time differences between accounting profit and taxable profit (to the extent that the result of the financial year is significantly affected in terms of taxes) Result before taxes 505,244,628 Definitively taxed income (DTI) (505,244,628) C. IMPACT OF EXTRAORDINARY ITEMS ON THE AMOUNT OF TAX ON THE PROFIT/(LOSS) FOR THE FINANCIAL YEAR D. SOURCES OF DEFERRED TAX (to the extent that these indications are important for the assessment of the company’s financial situation) 1. Deferred assets 8.15.4.1 12,984,839,378 - Accumulated tax losses deductible from subsequent taxable profits 8.15.4.11 10,551,989,298 - DTI deduction 2,432,850,080 2. Deferred liabilities 8.15.4.2 293 | 240 No. 16. Other taxes payable by third parties Amounts for the Amounts for the Codes current period previous period A. Taxes: 1. Taxes on insurance contracts borne by third parties 8.16.11 2. Other taxes payable by the company 8.16.12 B. Amounts withheld from third parties in respect of: 1. Withholding tax on earned income 8.16.21 11,182,081 7,597,319 2. Withholding tax (on dividends) 8.16.22 125,314,084 125,543,837 AGEAS SA/NV STATUTORY ACCOUNTS 2021 292 Ageas Annual Report 2021 292 | 240 No. 15. Taxes on income Codes Amounts A. ITEM 15 a) 'Taxes': 8.15.1.634 72,858 1. Tax on income for the financial year 8.15.1.634.1 a. Advance payments and refundable prepayments 8.15.1.634.11 b. Other attributable assets 8.15.1.634.12 c. Excess of advance payments and/or refundable prepayments recorded as assets (-) 8.15.1.634.13 d. Estimated additional taxes (included in liability item G.V.1.a) 8.15.1.634.14 2. Tax on income for previous financial years 8.15.1.634.2 72,858 a) Additional taxes due or paid: 8.15.1.634.21 72,858 b) Estimated additional taxes (included in liability item G.V.1.a) or provisioned (included in liability item E.II.2.) 8.15.1.634.22 B. PRINCIPAL SOURCES OF DISPARITIES BETWEEN PRE-TAX PROFIT, expressed in the accounts AND THE ESTIMATED TAXABLE PROFIT, with particular reference to those arising from time differences between accounting profit and taxable profit (to the extent that the result of the financial year is significantly affected in terms of taxes) Result before taxes 505,244,628 Definitively taxed income (DTI) (505,244,628) C. IMPACT OF EXTRAORDINARY ITEMS ON THE AMOUNT OF TAX ON THE PROFIT/(LOSS) FOR THE FINANCIAL YEAR D. SOURCES OF DEFERRED TAX (to the extent that these indications are important for the assessment of the company’s financial situation) 1. Deferred assets 8.15.4.1 12,984,839,378 - Accumulated tax losses deductible from subsequent taxable profits 8.15.4.11 10,551,989,298 - DTI deduction 2,432,850,080 2. Deferred liabilities 8.15.4.2 293 | 240 No. 16. Other taxes payable by third parties Amounts for the Amounts for the Codes current period previous period A. Taxes: 1. Taxes on insurance contracts borne by third parties 8.16.11 2. Other taxes payable by the company 8.16.12 B. Amounts withheld from third parties in respect of: 1. Withholding tax on earned income 8.16.21 11,182,081 7,597,319 2. Withholding tax (on dividends) 8.16.22 125,314,084 125,543,837 293 Ageas Annual Report 2021 294 | 240 No. 17. Off-balance sheet rights and commitments (Art. 14) (An asterisk () to the right of the wording of an item or sub-item indicates that there is a definition or explanatory note in Chapter III of the Annex to the Decree of 17/11/1994) Codes Amounts A. Guarantees issued or irrevocably promised by third parties on behalf of the company: 8.17.00 B. Guarantees personally issued or irrevocably promised by the company on behalf of third parties: 8.17.01 C. Guarantees actually issued or irrevocably promised by the company on its own assets as a security for debts or commitments a) of the company: 8.17.020 601,545,886 b) of third-parties: 8.17.021 D. Guarantees received (non-cash): a) reinsurers' securities (see Chapter III, Definitions and explanatory notes: asset item C.III.1 and 2 and liability item F.): 8.17.030 b) other: 8.17.031 E. Forward markets: a) securities transactions (purchases): 8.17.040 b) securities transactions (sales): 8.17.041 c) currency transactions (receivable): 8.17.042 d) currency transactions (to be delivered): 8.17.043 e) Interest rate transactions (purchases, etc.) : 8.17.044 f) interest rate transactions (sales, etc.) : 8.17.045 g) other operations (purchases, etc.) : 8.17.046 h) other operations (sales, etc.) : 8.17.047 F. Property and securities of third parties held by the company: 8.17.05 G. The nature and business purpose of off-balance sheet transactions, and the financial impact of such transactions, provided that the risks or rewards arising from such transactions are material and to the extent that the disclosure of such risks or rewards is necessary for the assessment of the company's financial situation. 8.17.06 Gbis. The nature and financial impact of material events occurring after the balance sheet date that are not reflected in the income statement or balance sheet: Please refer to note 44 – Events after the date of the statement of financial position in the Ageas’s Consolidated Financial Statements. 8.17.06B H. Other (please specify): 8.17.07 295 | 240 No. 18. Relations with affiliates and entities with which there is a participating interest Affiliated Entities with a entreprises participation link Current Previous Current Previous Balance sheet items concerned Codes period period period period C. II. Investments in affiliated enterprises and participations 8.18.222 7,293,892,953 7,262,381,935 65,518,228 1,739,814 1 + 3 Participations 8.18.222.01 6,436,159,584 6,436,159,584 29,927 1,739,814 2 + 4 Notes, bonds and receivables 8.18.222.02 857,733,369 826,222,351 65,488,301 - subordinated 8.18.222.021 - other 8.18.222.022 857,733,369 826,222,351 65,488,301 D. II. Investments in affiliated enterprises and participations 8.18.232 1 + 3 Participations 8.18.232.01 2 + 4 Notes, bonds and receivables 8.18.232.02 - subordinated 8.18.232.021 - other 8.18.232.022 E. Receivables 8.18.41 391,165,728 500,207,496 I. Receivables from direct insurance operations 8.18.411 II. Reinsurance from reinsurance operations 8.18.412 81,891,610 15,164,021 III. Other receivables 8.18.413 309,274,118 485,043,475 F. Subordinated liabilities 8.18.12 G. Debts 8.18.42 26,803,487 12,430,965 I. Direct insurance payables 8.18.421 II. Reinsurance payables 8.18.422 26,803,487 12,430,965 III. Unsubordinated bonds 8.18.423 IV. Debt owed to credit institutions 8.18.424 V. Other amounts payable 8.18.425 No. 18. Relations with affiliates and entities with which there is a participating interest (continuation and end) Associates Codes Current period Previous period - PERSONAL AND ACTUAL GUARANTEES, constituted or irrevocably promised by the company as security for debts or commitments of associates 8.18.50 - PERSONAL AND ACTUAL GUARANTEES, constituted or irrevocably promised by associates as security for debts or commitments of the company 8.18.51 - Other significant financial commitments 8.18.52 - Income from land and buildings 8.18.53 - Income from other investments 8.18.54 16,401,809 13,194,862 AGEAS SA/NV STATUTORY ACCOUNTS 2021 294 Ageas Annual Report 2021 294 | 240 No. 17. Off-balance sheet rights and commitments (Art. 14) (An asterisk () to the right of the wording of an item or sub-item indicates that there is a definition or explanatory note in Chapter III of the Annex to the Decree of 17/11/1994) Codes Amounts A. Guarantees issued or irrevocably promised by third parties on behalf of the company: 8.17.00 B. Guarantees personally issued or irrevocably promised by the company on behalf of third parties: 8.17.01 C. Guarantees actually issued or irrevocably promised by the company on its own assets as a security for debts or commitments a) of the company: 8.17.020 601,545,886 b) of third-parties: 8.17.021 D. Guarantees received (non-cash): a) reinsurers' securities (see Chapter III, Definitions and explanatory notes: asset item C.III.1 and 2 and liability item F.): 8.17.030 b) other: 8.17.031 E. Forward markets: a) securities transactions (purchases): 8.17.040 b) securities transactions (sales): 8.17.041 c) currency transactions (receivable): 8.17.042 d) currency transactions (to be delivered): 8.17.043 e) Interest rate transactions (purchases, etc.) : 8.17.044 f) interest rate transactions (sales, etc.) : 8.17.045 g) other operations (purchases, etc.) : 8.17.046 h) other operations (sales, etc.) : 8.17.047 F. Property and securities of third parties held by the company: 8.17.05 G. The nature and business purpose of off-balance sheet transactions, and the financial impact of such transactions, provided that the risks or rewards arising from such transactions are material and to the extent that the disclosure of such risks or rewards is necessary for the assessment of the company's financial situation. 8.17.06 Gbis. The nature and financial impact of material events occurring after the balance sheet date that are not reflected in the income statement or balance sheet: Please refer to note 44 – Events after the date of the statement of financial position in the Ageas’s Consolidated Financial Statements. 8.17.06B H. Other (please specify): 8.17.07 295 | 240 No. 18. Relations with affiliates and entities with which there is a participating interest Affiliated Entities with a entreprises participation link Current Previous Current Previous Balance sheet items concerned Codes period period period period C. II. Investments in affiliated enterprises and participations 8.18.222 7,293,892,953 7,262,381,935 65,518,228 1,739,814 1 + 3 Participations 8.18.222.01 6,436,159,584 6,436,159,584 29,927 1,739,814 2 + 4 Notes, bonds and receivables 8.18.222.02 857,733,369 826,222,351 65,488,301 - subordinated 8.18.222.021 - other 8.18.222.022 857,733,369 826,222,351 65,488,301 D. II. Investments in affiliated enterprises and participations 8.18.232 1 + 3 Participations 8.18.232.01 2 + 4 Notes, bonds and receivables 8.18.232.02 - subordinated 8.18.232.021 - other 8.18.232.022 E. Receivables 8.18.41 391,165,728 500,207,496 I. Receivables from direct insurance operations 8.18.411 II. Reinsurance from reinsurance operations 8.18.412 81,891,610 15,164,021 III. Other receivables 8.18.413 309,274,118 485,043,475 F. Subordinated liabilities 8.18.12 G. Debts 8.18.42 26,803,487 12,430,965 I. Direct insurance payables 8.18.421 II. Reinsurance payables 8.18.422 26,803,487 12,430,965 III. Unsubordinated bonds 8.18.423 IV. Debt owed to credit institutions 8.18.424 V. Other amounts payable 8.18.425 No. 18. Relations with affiliates and entities with which there is a participating interest (continuation and end) Associates Codes Current period Previous period - PERSONAL AND ACTUAL GUARANTEES, constituted or irrevocably promised by the company as security for debts or commitments of associates 8.18.50 - PERSONAL AND ACTUAL GUARANTEES, constituted or irrevocably promised by associates as security for debts or commitments of the company 8.18.51 - Other significant financial commitments 8.18.52 - Income from land and buildings 8.18.53 - Income from other investments 8.18.54 16,401,809 13,194,862 295 Ageas Annual Report 2021 296 | 240 No. 19. Financial relations with: A. the directors or managers; B. natural or legal persons who directly or indirectly control the entity without being linked to it; C. other entities controlled directly or indirectly by the persons listed under B. Codes Amounts 1. Receivables from the aforementioned persons 8.19.1 2. Guarantees given in their favour 8.19.2 3. Other significant commitments undertaken in their favour 8.19.3 4. Direct and indirect remuneration and pensions allocated, charged to the income statement, - to the directors and managers 8.19.41 6,842,462 - to the former directors and former managers 8.19.42 The interest rate, the main conditions and any amounts redeemed or written off that have been waived relating to points 1., 2. and 3. above. No. 19bis. Financial relations with: The statutory auditor(s) and their associates Codes Amounts 1. Fees of the statutory auditor(s) 8.19.5 700,650 2. Fees for exceptional services or special missions performed within the company by the statutory auditor(s) 8.19.6 171,611 - Other attestation missions 8.19.61 171,611 - Tax consultancy 8.19.62 0 - Other missions external to the audit 8.19.63 0 3. Fees for exceptional services or special missions performed within the company by persons with whom the statutory auditor(s) is (are) linked 8.19.7 0 - Other audit missions 8.19.71 0 - Tax consultancy missions 8.19.72 0 - Other missions outside the audit mission 8.19.73 0 Indication in application of Article 133 §6 of the Companies Code 297 | 240 No. 20. Valuation rules (This statement is covered in particular by articles: 12 bis, § 5; 15; 19, paragraph 3; 22bis, paragraph 3; 24, paragraph 2; 27, 1°, last paragraph and 2°, last paragraph; 27 bis, § 4, last paragraph 3; 28, § 2, paragraph 1 and 4; 34, paragraph 2; 34 quinquies, paragraph 1; 34 sexies, 6°, last paragraph; 34 septies, § 2 and Chapter III. ‘Definitions and explanatory notes', Section II, item 'notional rent'). A. Rules governing valuations in the inventory (excluding investments in asset item D.) 1 Formation and depreciation adjustments 2. Write-downs 3. Provisions for risks and charges 4. Technical provisions 5. Revaluations 6. Other B. Rules governing valuations in the inventory with respect to investments in asset item D. 1. Investments other than land and buildings 2. Land and buildings 3. Other AGEAS SA/NV STATUTORY ACCOUNTS 2021 296 Ageas Annual Report 2021 296 | 240 No. 19. Financial relations with: A. the directors or managers; B. natural or legal persons who directly or indirectly control the entity without being linked to it; C. other entities controlled directly or indirectly by the persons listed under B. Codes Amounts 1. Receivables from the aforementioned persons 8.19.1 2. Guarantees given in their favour 8.19.2 3. Other significant commitments undertaken in their favour 8.19.3 4. Direct and indirect remuneration and pensions allocated, charged to the income statement, - to the directors and managers 8.19.41 6,842,462 - to the former directors and former managers 8.19.42 The interest rate, the main conditions and any amounts redeemed or written off that have been waived relating to points 1., 2. and 3. above. No. 19bis. Financial relations with: The statutory auditor(s) and their associates Codes Amounts 1. Fees of the statutory auditor(s) 8.19.5 700,650 2. Fees for exceptional services or special missions performed within the company by the statutory auditor(s) 8.19.6 171,611 - Other attestation missions 8.19.61 171,611 - Tax consultancy 8.19.62 0 - Other missions external to the audit 8.19.63 0 3. Fees for exceptional services or special missions performed within the company by persons with whom the statutory auditor(s) is (are) linked 8.19.7 0 - Other audit missions 8.19.71 0 - Tax consultancy missions 8.19.72 0 - Other missions outside the audit mission 8.19.73 0 Indication in application of Article 133 §6 of the Companies Code 297 | 240 No. 20. Valuation rules (This statement is covered in particular by articles: 12 bis, § 5; 15; 19, paragraph 3; 22bis, paragraph 3; 24, paragraph 2; 27, 1°, last paragraph and 2°, last paragraph; 27 bis, § 4, last paragraph 3; 28, § 2, paragraph 1 and 4; 34, paragraph 2; 34 quinquies, paragraph 1; 34 sexies, 6°, last paragraph; 34 septies, § 2 and Chapter III. ‘Definitions and explanatory notes', Section II, item 'notional rent'). A. Rules governing valuations in the inventory (excluding investments in asset item D.) 1 Formation and depreciation adjustments 2. Write-downs 3. Provisions for risks and charges 4. Technical provisions 5. Revaluations 6. Other B. Rules governing valuations in the inventory with respect to investments in asset item D. 1. Investments other than land and buildings 2. Land and buildings 3. Other 297 Ageas Annual Report 2021 298 | 240 These accounting principles are defined in accordance with the Royal Decree of 17 November 1994 on the annual accounts of insurance and reinsurance companies. Formation expenses Expenses relating to a capital increase are amortized over a maximum period of 5 years. Borrowing costs are amortized over the shorter of the first call date or the lifetime of the loan. Intangible assets Purchased computer software is accounted for at acquisition value, less accumulated amortization. These assets are amortized over a period of 5 years. Investments in affiliated enterprises and participations Investments in affiliated enterprises and participations are accounted for at acquisition value, including transaction expenses, less any accumulated impairment losses. An impairment loss on participating interests, shares or interests equivalent to shares, included in this section of the balance sheet, is recognized in case of durable reduction in value justified by the financial position, profitability or future prospects of the company in which the participating interests or shares are held. Impairment losses are reversed to the extent that at the reporting date they are higher compared to what is required by a current assessment. Impairments on receivables and fixed-income securities are applied when uncertainty exists at the reporting date with regard the payment (partial or in full) of the receivables. Other financial investments Equities, shares and other variable income securities are accounted for at acquisition value, less accumulated impairment losses. Directly attributable transaction costs are recorded in the income statement of the financial year in which the acquisition was performed. At reporting date, the shares are subject to an assessment in order to determine whether the unrealized losses are durable based on their prolonged decline and the evolution of the stock markets. For listed shares and other equivalent interests, an impairment is automatically accounted for if the stock price on the reporting date has declined by 25% or more in comparison to its acquisition value, or if the stock price remains below its acquisition value for 365 consecutive days. This accounting policy is applicable except when other indicators are deemed to be more appropriate. In case the assessment leads to a value lower than its book value, an impairment loss, equal to the difference between the carrying amount and the fair value, is recorded. If the assessment leads to a value higher than its carrying amount, a reversal of the impairment loss, equal to the difference between the carrying amount and the fair value, is recorded up to the maximum amount of the impairment losses recorded in prior periods. For non-listed shares and participating interests, a valuation is made similar to the one on participating interests in affiliated companies and participations as explained above, based on the intrinsic value. Bonds, receivables, loans and other fixed-income securities are accounted for at acquisition value, excluding directly attributable acquisition costs less accumulated impairment losses. If, the effective interest rate calculated at acquisition date, taking into account the amount payable at maturity, differs from the nominal rate, the difference between the acquisition value and the amount payable at maturity is accounted for in the income statement on a pro rata temporis basis over the remaining term of the financial assets as a component of the interest income from these assets and, depending on the situation, added to or deducted from the acquisition value of the financial assets. Directly attributable costs are recognized in the income statement of the financial year in which they are incurred. An impairment loss is recognized to the extent that there is a risk that the issuer would not or not fully meet its obligations. The assessment of this risk is based on the notion of a credit event as detailed in IAS 39.58- 62 (EU version). Where appropriate, the impairment loss is also determined in accordance with the principles of IAS 39. Realised gains and losses from the sale of fixed-income securities pertaining to arbitrage transactions may be spread in income together with the future revenues of the securities acquired or sold in the context of the arbitrage. Deposits with ceding entities Deposits with ceding entities include receivables on the ceding companies which correspond to the guarantees given to or withheld from these companies or from a third party. Impairment losses are recognized in accordance with the above described valuation rules for "other financial investments - bonds, receivables, loans and other fixed-income securities". Receivables Receivables are accounted for at nominal value or acquisition value, as appropriate. Impairment losses are recorded to the extent that a risk exists that the debtor would not or not fully meet its obligations. The assessment of this risk is based on the notion of a credit event as detailed in IAS 39.58-62 (EU version). Where appropriate, the impairment amount is also determined in accordance with the principles of IAS 39. 299 | 240 Tangible fixed assets Electronic equipment, furniture and furnishing are measured at acquisition value, less accumulated depreciation and any accumulated impairment losses. Furniture and electronic equipment is depreciated over a period of 3 years. Furnishing is depreciated over a period of 9 years. Cash and cash equivalents Impairment losses are recognised on cash and cash equivalents when the recoverable amount at reporting date is lower than the nominal value. Treasury shares With respect to treasury shares presented on the asset side of the balance sheet a reserve not available for distribution is set up, equal to the value for which the purchased shares are registered. At reporting date an impairment loss is recorded when the fair value is below acquisition value. Foreign currency transactions and foreign currency translation of monetary assets and liabilities Transactions in foreign currency are translated into EUR using the exchange rate at the transaction date. Monetary assets and liabilities in foreign currencies are translated into EUR using the exchange rates at reporting date. The gains or losses arising from this translation, and realized exchange rate differences, are recognized in the income statement. Translation differences related to technical provisions denominated in foreign currency, are included in the item "Other technical charges, gross of reinsurance" in the technical account "non- life insurance". Subordinated liabilities Subordinated liabilities are initially recognized at fair value. If the effective interest rate calculated at the issuance date differs from the nominal interest rate, taking into account the amount payable at maturity, the difference between the initial fair value and the amount payable at maturity is included in the income statement on a pro rata temporis basis over the remaining term of the liability as a component of the interest cost, and depending on the situation, added to or deducted from the initial fair value. Technical provisions The provision for unearned premiums represents that portion of the assumed reinsurance premiums received that relates to the next financial year or subsequent financial years to cover claims and administration costs. The provision for unearned premiums is, in principle, calculated according to the pro rata temporis method. A provision for premium deficiency is established to supplement the provision for unearned premiums when it appears that the estimated claims and administrative costs relating to current and renewed contracts will be higher than the total of the unearned premium provision related to these agreements. The claims provision is based on the estimated ultimate cost of settling all claims, whether reported or not, that are incurred up to the end of the financial year, less the amounts that have already been paid in respect of such claims. The provision is determined separately for each assumed reinsurance contract based on the information communicated by the ceding companies per product category, coverage and year and all other available elements. If necessary, the provision is supplemented on the basis of available statistical information. The equalization and catastrophe provision is a regulatory provision recognized with the aim of either compensating for the non-recurring technical loss in the coming years or leveling the fluctuations in the claims ratio. The target amount of the provision is determined according to the lump sum method (National Bank of Belgium - communication D151). Provisions for other risks and charges Provisions for other risks and charges are intended to cover, by their nature, clearly defined losses or costs that are probable or certain at the reporting date, however for which the amount is not fixed. The provisions for other risks and charges must meet the principles of prudence, sincerity and good faith. The provision for other risks and charges are set up on an individual basis according to the risks and charges they intend to cover. Provisions for pensions and similar obligations For its employees the Company set up pension plans of the type “defined benefits” and "defined contribution", with a minimum return guaranteed by law. The first are subject to additional provisions within the technical provisions recognized on the balance sheet. The additional provisions reflect the obligations specific to the employer and are accounted for according to accounting principles similar to IAS 19. The Company accounts for the defined contribution pension plans in accordance with the intrinsic value method. According to this method, the pension obligation is based on the sum of the positive differences between the minimum legal reserve, on the calculation date (calculated by capitalizing past contributions at the minimum guaranteed return rate, as defined in Article 24 of the law on occupational pensions (WAP/LPC), up to the calculation date) and the actual accrued reserves (the reserves are calculated by capitalising the past contributions at the technical interest rate, taking into account profit sharing up to the calculation date). AGEAS SA/NV STATUTORY ACCOUNTS 2021 298 Ageas Annual Report 2021 298 | 240 These accounting principles are defined in accordance with the Royal Decree of 17 November 1994 on the annual accounts of insurance and reinsurance companies. Formation expenses Expenses relating to a capital increase are amortized over a maximum period of 5 years. Borrowing costs are amortized over the shorter of the first call date or the lifetime of the loan. Intangible assets Purchased computer software is accounted for at acquisition value, less accumulated amortization. These assets are amortized over a period of 5 years. Investments in affiliated enterprises and participations Investments in affiliated enterprises and participations are accounted for at acquisition value, including transaction expenses, less any accumulated impairment losses. An impairment loss on participating interests, shares or interests equivalent to shares, included in this section of the balance sheet, is recognized in case of durable reduction in value justified by the financial position, profitability or future prospects of the company in which the participating interests or shares are held. Impairment losses are reversed to the extent that at the reporting date they are higher compared to what is required by a current assessment. Impairments on receivables and fixed-income securities are applied when uncertainty exists at the reporting date with regard the payment (partial or in full) of the receivables. Other financial investments Equities, shares and other variable income securities are accounted for at acquisition value, less accumulated impairment losses. Directly attributable transaction costs are recorded in the income statement of the financial year in which the acquisition was performed. At reporting date, the shares are subject to an assessment in order to determine whether the unrealized losses are durable based on their prolonged decline and the evolution of the stock markets. For listed shares and other equivalent interests, an impairment is automatically accounted for if the stock price on the reporting date has declined by 25% or more in comparison to its acquisition value, or if the stock price remains below its acquisition value for 365 consecutive days. This accounting policy is applicable except when other indicators are deemed to be more appropriate. In case the assessment leads to a value lower than its book value, an impairment loss, equal to the difference between the carrying amount and the fair value, is recorded. If the assessment leads to a value higher than its carrying amount, a reversal of the impairment loss, equal to the difference between the carrying amount and the fair value, is recorded up to the maximum amount of the impairment losses recorded in prior periods. For non-listed shares and participating interests, a valuation is made similar to the one on participating interests in affiliated companies and participations as explained above, based on the intrinsic value. Bonds, receivables, loans and other fixed-income securities are accounted for at acquisition value, excluding directly attributable acquisition costs less accumulated impairment losses. If, the effective interest rate calculated at acquisition date, taking into account the amount payable at maturity, differs from the nominal rate, the difference between the acquisition value and the amount payable at maturity is accounted for in the income statement on a pro rata temporis basis over the remaining term of the financial assets as a component of the interest income from these assets and, depending on the situation, added to or deducted from the acquisition value of the financial assets. Directly attributable costs are recognized in the income statement of the financial year in which they are incurred. An impairment loss is recognized to the extent that there is a risk that the issuer would not or not fully meet its obligations. The assessment of this risk is based on the notion of a credit event as detailed in IAS 39.58- 62 (EU version). Where appropriate, the impairment loss is also determined in accordance with the principles of IAS 39. Realised gains and losses from the sale of fixed-income securities pertaining to arbitrage transactions may be spread in income together with the future revenues of the securities acquired or sold in the context of the arbitrage. Deposits with ceding entities Deposits with ceding entities include receivables on the ceding companies which correspond to the guarantees given to or withheld from these companies or from a third party. Impairment losses are recognized in accordance with the above described valuation rules for "other financial investments - bonds, receivables, loans and other fixed-income securities". Receivables Receivables are accounted for at nominal value or acquisition value, as appropriate. Impairment losses are recorded to the extent that a risk exists that the debtor would not or not fully meet its obligations. The assessment of this risk is based on the notion of a credit event as detailed in IAS 39.58-62 (EU version). Where appropriate, the impairment amount is also determined in accordance with the principles of IAS 39. 299 | 240 Tangible fixed assets Electronic equipment, furniture and furnishing are measured at acquisition value, less accumulated depreciation and any accumulated impairment losses. Furniture and electronic equipment is depreciated over a period of 3 years. Furnishing is depreciated over a period of 9 years. Cash and cash equivalents Impairment losses are recognised on cash and cash equivalents when the recoverable amount at reporting date is lower than the nominal value. Treasury shares With respect to treasury shares presented on the asset side of the balance sheet a reserve not available for distribution is set up, equal to the value for which the purchased shares are registered. At reporting date an impairment loss is recorded when the fair value is below acquisition value. Foreign currency transactions and foreign currency translation of monetary assets and liabilities Transactions in foreign currency are translated into EUR using the exchange rate at the transaction date. Monetary assets and liabilities in foreign currencies are translated into EUR using the exchange rates at reporting date. The gains or losses arising from this translation, and realized exchange rate differences, are recognized in the income statement. Translation differences related to technical provisions denominated in foreign currency, are included in the item "Other technical charges, gross of reinsurance" in the technical account "non- life insurance". Subordinated liabilities Subordinated liabilities are initially recognized at fair value. If the effective interest rate calculated at the issuance date differs from the nominal interest rate, taking into account the amount payable at maturity, the difference between the initial fair value and the amount payable at maturity is included in the income statement on a pro rata temporis basis over the remaining term of the liability as a component of the interest cost, and depending on the situation, added to or deducted from the initial fair value. Technical provisions The provision for unearned premiums represents that portion of the assumed reinsurance premiums received that relates to the next financial year or subsequent financial years to cover claims and administration costs. The provision for unearned premiums is, in principle, calculated according to the pro rata temporis method. A provision for premium deficiency is established to supplement the provision for unearned premiums when it appears that the estimated claims and administrative costs relating to current and renewed contracts will be higher than the total of the unearned premium provision related to these agreements. The claims provision is based on the estimated ultimate cost of settling all claims, whether reported or not, that are incurred up to the end of the financial year, less the amounts that have already been paid in respect of such claims. The provision is determined separately for each assumed reinsurance contract based on the information communicated by the ceding companies per product category, coverage and year and all other available elements. If necessary, the provision is supplemented on the basis of available statistical information. The equalization and catastrophe provision is a regulatory provision recognized with the aim of either compensating for the non-recurring technical loss in the coming years or leveling the fluctuations in the claims ratio. The target amount of the provision is determined according to the lump sum method (National Bank of Belgium - communication D151). Provisions for other risks and charges Provisions for other risks and charges are intended to cover, by their nature, clearly defined losses or costs that are probable or certain at the reporting date, however for which the amount is not fixed. The provisions for other risks and charges must meet the principles of prudence, sincerity and good faith. The provision for other risks and charges are set up on an individual basis according to the risks and charges they intend to cover. Provisions for pensions and similar obligations For its employees the Company set up pension plans of the type “defined benefits” and "defined contribution", with a minimum return guaranteed by law. The first are subject to additional provisions within the technical provisions recognized on the balance sheet. The additional provisions reflect the obligations specific to the employer and are accounted for according to accounting principles similar to IAS 19. The Company accounts for the defined contribution pension plans in accordance with the intrinsic value method. According to this method, the pension obligation is based on the sum of the positive differences between the minimum legal reserve, on the calculation date (calculated by capitalizing past contributions at the minimum guaranteed return rate, as defined in Article 24 of the law on occupational pensions (WAP/LPC), up to the calculation date) and the actual accrued reserves (the reserves are calculated by capitalising the past contributions at the technical interest rate, taking into account profit sharing up to the calculation date). 299 Ageas Annual Report 2021 300 | 240 No. 21. Amendments to the valuation rules (art. 16)(art. 17) A. Statement of changes and the reasoning behind those changes B. Difference in estimate resulting from the changes (to be indicated for the first time for the financial year during which these changes were made) Items and sub-items concerned () Amounts Items and sub-items concerned () Amounts () with figures and letters relating to the wording of the item or sub-item concerned in the balance sheet (example : CIII.2. Bonds and other fixed income securities) 301 | 240 No. 22. Declaration relating to the consolidated financial statements A. Information to be completed by all companies. - The company prepares and publishes consolidated accounts and a consolidated management report in accordance with the provisions of the Royal Decree on the consolidated accounts of insurance and reinsurance companies: yes/no (): - The company does not prepare consolidated accounts or a consolidated management report for the following reason(s) (): * the company does not control, alone or jointly, one or more subsidiaries under Belgian or foreign law yes/no (): * the company is itself a subsidiary of a parent company that prepares and publishes consolidated accounts: yes/no (): - Substantiation of compliance with the conditions laid down in Article 8(2) and (3) of the Royal Decree of 6 March 1990 on the consolidated accounts of companies: - Name, full address of the headquarters and for a company under Belgian law, VAT number or the national number of the parent company that prepares and publishes consolidated accounts under which the exemption is authorised: () Delete where appropriate. No. 22. Declaration relating to the consolidated financial statements (cont. and end). B. Information to be completed by the company if it is a joint subsidiary. - Name, full address of the headquarters and for a company under Belgian law, VAT number or the national number of the parent company(ies) and an indication of whether the parent company(ies) prepare(s) and publish(es) consolidated accounts in which its annual accounts are consolidated(): - If the parent company(ies) is (are) incorporated abroad, the location where the consolidated accounts referred to above can be obtained (): () If the accounts of the company are consolidated at more than one level, the information shall be given first for the largest group and then for the smallest group of companies of which the company is a subsidiary and for which consolidated accounts are drawn up and published. AGEAS SA/NV STATUTORY ACCOUNTS 2021 300 Ageas Annual Report 2021 300 | 240 No. 21. Amendments to the valuation rules (art. 16)(art. 17) A. Statement of changes and the reasoning behind those changes B. Difference in estimate resulting from the changes (to be indicated for the first time for the financial year during which these changes were made) Items and sub-items concerned () Amounts Items and sub-items concerned () Amounts () with figures and letters relating to the wording of the item or sub-item concerned in the balance sheet (example : CIII.2. Bonds and other fixed income securities) 301 | 240 No. 22. Declaration relating to the consolidated financial statements A. Information to be completed by all companies. - The company prepares and publishes consolidated accounts and a consolidated management report in accordance with the provisions of the Royal Decree on the consolidated accounts of insurance and reinsurance companies: yes/no (): - The company does not prepare consolidated accounts or a consolidated management report for the following reason(s) (): * the company does not control, alone or jointly, one or more subsidiaries under Belgian or foreign law yes/no (): * the company is itself a subsidiary of a parent company that prepares and publishes consolidated accounts: yes/no (): - Substantiation of compliance with the conditions laid down in Article 8(2) and (3) of the Royal Decree of 6 March 1990 on the consolidated accounts of companies: - Name, full address of the headquarters and for a company under Belgian law, VAT number or the national number of the parent company that prepares and publishes consolidated accounts under which the exemption is authorised: () Delete where appropriate. No. 22. Declaration relating to the consolidated financial statements (cont. and end). B. Information to be completed by the company if it is a joint subsidiary. - Name, full address of the headquarters and for a company under Belgian law, VAT number or the national number of the parent company(ies) and an indication of whether the parent company(ies) prepare(s) and publish(es) consolidated accounts in which its annual accounts are consolidated(): - If the parent company(ies) is (are) incorporated abroad, the location where the consolidated accounts referred to above can be obtained (): (**) If the accounts of the company are consolidated at more than one level, the information shall be given first for the largest group and then for the smallest group of companies of which the company is a subsidiary and for which consolidated accounts are drawn up and published. 301 Ageas Annual Report 2021 302 | 240 No. 23. Additional information to be provided by the company on the basis of the present decree of 17 November 1994. The company shall mention any additional information that may be required: - by articles: 2 bis; 4, paragraph 2; 10, paragraph 2; 11, paragraph 3; 19, paragraph 4; 22; 27 bis, § 3, last paragraph; 33, paragraph 2; 34 sexies, § 1, 4°; 39. - Chapter III, Section I of the Annex: for asset items C.II.1., C.II.3, C.III.7.c) and F.IV. and for liability item C.I.b) in C.IV. Indication in application of Article 27bis, §3, last paragraph: The impact on the income statement for 2021, pro rata temporis over the remaining life of the securities, of the difference between the acquisition cost and the redemption value represents a cost of EUR 6,443,863. RPN(I) Valuation Ageas applies a transfer notion to arrive at the fair value of the RPN(I) liability. Fair value is defined in IFRS 13 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The definition is explicitly described as an exit price, linked with the price 'paid to transfer a liability'. When such pricing is not available and the liability is held by another entity as an asset, the liability needs to be valued from the perspective of the market participant that holds the asset. Ageas values its liability at the reference amount. The RPN reference amount is based on the price of the CASHES and the price of the Ageas share. The reference amount increased from EUR 419.8 million at the end of 2020 to EUR 520.4 million on 31 December 2021, mainly as a result of a rise in the CASHES price from 84.17% to 95.61% in 2021, and an increase in the Ageas share price from EUR 43.58 to EUR 45.55 over the same period. Please refer to the note 23 ‘RPN (I)’ in the Ageas’s Consolidated Financial Statements. Contingent liabilities related to legal proceedings Please refer to the note 43 ‘Contingent liabilities’ in the Ageas’s Consolidated Financial Statements. No. 24 Transactions carried out by the entity with related parties at non-market conditions. The company shall disclose transactions with related parties, including the amount of such transactions, the nature of the relationship with the related party and any other information on the transactions that would be necessary for the assessment of the company’s financial position, where such transactions are material and have not been concluded under normal market conditions. The above information may be aggregated by their nature except where separate information is necessary to understand the effects of related party transactions on the financial position of the company. This information is not required for transactions that take place between two or more members of a group, provided that the subsidiaries that are parties to the transaction are wholly owned by such member. The term "related parties" has the same meaning as in the International Accounting Standards adopted in accordance with Regulation (EC) 1606/2002. NIHIL. For the purposes of this appendix, the concept of 'market conditions' has been equated with the concept of 'on an arm's length basis' used by the international reporting standards IFRS. 303 | 240 Due to conflict of interest, extracts of the minutes of the meetings are included in the current Report of the Board of Directors attached to the statutory financial statements of ageas SA/NV. Board meeting of 23 February – conflict of interest for the members of the Executive Committee with respect to the remuneration review With respect to topic 4 on the agenda, it was noted that the non-executive Board members had a pre-meeting without the executive members, other than the CEO (and without the CEO when the matter related to him), to discuss and decide upon the following topics :  Appraisal individual objectives EXCO/MCO 2020  Appraisal Business KPI’s 2020  Long Term Incentive - grant  Individual objectives EXCO/MCO 2021  Business KPI’s 2021  Share linked incentive plan Hence, it can be reported that the executive members, when being conflicted with the above- mentioned topics, did not participate to the discussion nor to the decision taking relating to these topics. Board meeting of 9 November – conflict of interest for the members of the Executive Committee with respect to the remuneration review The Chairman informed the Board members that the EXCO members would not participate to the discussions nor the decision taking related to the competitive review of the remuneration of the EXCO and the MCO members, scheduled under topic 8 - Report of the Remuneration Committee. C onflict of interest Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). AGEAS SA/NV STATUTORY ACCOUNTS 2021 302 Ageas Annual Report 2021 302 | 240 No. 23. Additional information to be provided by the company on the basis of the present decree of 17 November 1994. The company shall mention any additional information that may be required: - by articles: 2 bis; 4, paragraph 2; 10, paragraph 2; 11, paragraph 3; 19, paragraph 4; 22; 27 bis, § 3, last paragraph; 33, paragraph 2; 34 sexies, § 1, 4°; 39. - Chapter III, Section I of the Annex: for asset items C.II.1., C.II.3, C.III.7.c) and F.IV. and for liability item C.I.b) in C.IV. Indication in application of Article 27bis, §3, last paragraph: The impact on the income statement for 2021, pro rata temporis over the remaining life of the securities, of the difference between the acquisition cost and the redemption value represents a cost of EUR 6,443,863. RPN(I) Valuation Ageas applies a transfer notion to arrive at the fair value of the RPN(I) liability. Fair value is defined in IFRS 13 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The definition is explicitly described as an exit price, linked with the price 'paid to transfer a liability'. When such pricing is not available and the liability is held by another entity as an asset, the liability needs to be valued from the perspective of the market participant that holds the asset. Ageas values its liability at the reference amount. The RPN reference amount is based on the price of the CASHES and the price of the Ageas share. The reference amount increased from EUR 419.8 million at the end of 2020 to EUR 520.4 million on 31 December 2021, mainly as a result of a rise in the CASHES price from 84.17% to 95.61% in 2021, and an increase in the Ageas share price from EUR 43.58 to EUR 45.55 over the same period. Please refer to the note 23 ‘RPN (I)’ in the Ageas’s Consolidated Financial Statements. Contingent liabilities related to legal proceedings Please refer to the note 43 ‘Contingent liabilities’ in the Ageas’s Consolidated Financial Statements. No. 24 Transactions carried out by the entity with related parties at non-market conditions. The company shall disclose transactions with related parties, including the amount of such transactions, the nature of the relationship with the related party and any other information on the transactions that would be necessary for the assessment of the company’s financial position, where such transactions are material and have not been concluded under normal market conditions. The above information may be aggregated by their nature except where separate information is necessary to understand the effects of related party transactions on the financial position of the company. This information is not required for transactions that take place between two or more members of a group, provided that the subsidiaries that are parties to the transaction are wholly owned by such member. The term "related parties" has the same meaning as in the International Accounting Standards adopted in accordance with Regulation (EC) 1606/2002. NIHIL. For the purposes of this appendix, the concept of 'market conditions' has been equated with the concept of 'on an arm's length basis' used by the international reporting standards IFRS. 303 | 240 Due to conflict of interest, extracts of the minutes of the meetings are included in the current Report of the Board of Directors attached to the statutory financial statements of ageas SA/NV. Board meeting of 23 February – conflict of interest for the members of the Executive Committee with respect to the remuneration review With respect to topic 4 on the agenda, it was noted that the non-executive Board members had a pre-meeting without the executive members, other than the CEO (and without the CEO when the matter related to him), to discuss and decide upon the following topics :  Appraisal individual objectives EXCO/MCO 2020  Appraisal Business KPI’s 2020  Long Term Incentive - grant  Individual objectives EXCO/MCO 2021  Business KPI’s 2021  Share linked incentive plan Hence, it can be reported that the executive members, when being conflicted with the above- mentioned topics, did not participate to the discussion nor to the decision taking relating to these topics. Board meeting of 9 November – conflict of interest for the members of the Executive Committee with respect to the remuneration review The Chairman informed the Board members that the EXCO members would not participate to the discussions nor the decision taking related to the competitive review of the remuneration of the EXCO and the MCO members, scheduled under topic 8 - Report of the Remuneration Committee. C onflict of interest Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). 303 Ageas Annual Report 2021 Conﬂict of interest 304 | 240 STATUTORY AUDITOR’S REPORT TO THE GENERAL SHAREHOLDERS’ MEETING OF AGEAS ON THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021 We present to you our Statutory auditor’s report in the context of our statutory audit of the annual accounts of Ageas (the “Company”). This report includes our report on the annual accounts, as well as the other legal and regulatory requirements. This forms part of an integrated whole and is indivisible. We have been appointed as Statutory auditor by the General meeting d.d. 19 May 2021, following the proposal formulated by the Board of directors and following the recommendation by the Audit committee. Our mandate will expire on the date of the General meeting which will deliberate on the annual accounts for the year ended 31 December 2023. We have performed the statutory audit of the Company’s annual accounts for four consecutive years. Report on the annual accounts Unqualified opinion We have performed the statutory audit of the Company’s annual accounts, which comprise the balance sheet as at 31 December 2021, and the profit and loss account for the year then ended, and the notes to the annual accounts, characterised by a balance sheet total of EUR 10,140,476,675 and a profit and loss account showing a profit for the year of EUR 505,171,770. In our opinion, the annual accounts give a true and fair view of the Company’s net equity and financial position as at 31 December 2021, and of its results for the year then ended, in accordance with the financial-reporting framework applicable in Belgium. Basis for unqualified opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Belgium. Furthermore, we have applied the International Standards on Auditing as approved by the IAASB which are applicable to the year-end and which are not yet approved at the national level. Our responsibilities under those standards are further described in the “Statutory auditor’s responsibilities for the audit of the annual accounts” section of our report. We have fulfilled our ethical responsibilities in accordance with the ethical requirements that are relevant to our audit of the annual accounts in Belgium, including the requirements related to independence. We have obtained from the Board of directors and Company officials the explanations and information necessary for performing our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Statutory Auditor’s Report 305 | 240 Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the annual accounts of the current period. These matters were addressed in the context of our audit of the annual accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Adequacy of the amount of the technical provisions Description of the key audit matter As per 31 December 2021, the technical provisions amount to EUR 1,562,792,214. For detailed information regarding the valuation of the technical provisions, please refer to Note 20 to the annual accounts (point “technical provisions”). The provisions are determined based on the information communicated by ceding companies, which are mainly subsidiaries of the Company. The adequacy test of technical provisions is based on actuarial techniques. It is relatively complex in that it is based on a number of assumptions that require significant judgement regarding future events. The latter may be influenced by future economic or business conditions as well as by laws and regulations specific to the insurance sector. The assumptions used within the adequacy test depend mainly on the amounts paid for claims, the number of claims incurred but not yet reported and claims expenses. The aforementioned different elements, combined with the possible uncertainty related to modelling techniques and the discretionary nature of the assumptions used in the adequacy test, are the main reasons why we considered this topic as a key audit matter. Our audit procedures related to the key audit matter We carried out verifications regarding the operational effectiveness of the controls implemented by the subsidiaries of the Company in order to ensure the quality of the data used within the adequacy test of technical provisions. We have independently recalculated the best estimate of claims reserves based on recognised actuarial techniques. We then compared our results with those of the Company and obtained satisfying documentation regarding the significant differences observed. Finally, we corroborated our conclusions with the Company’s actuarial function. Based on the aforementioned audit procedures, we believe that the assumptions used in the adequacy test of technical provisions are reasonable in relation to the current market conditions and the technical results of the past financial year. Responsibilities of the Board of directors for the preparation of the annual accounts The Board of directors is responsible for the preparation of annual accounts that give a true and fair view in accordance with the financial- reporting framework applicable in Belgium, and for such internal control as the Board of directors determines is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error. In preparing the annual accounts, the Board of directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and 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. AGEAS SA/NV STATUTORY ACCOUNTS 2021 304 Ageas Annual Report 2021 Statutory Auditor’s Report 304 | 240 STATUTORY AUDITOR’S REPORT TO THE GENERAL SHAREHOLDERS’ MEETING OF AGEAS ON THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021 We present to you our Statutory auditor’s report in the context of our statutory audit of the annual accounts of Ageas (the “Company”). This report includes our report on the annual accounts, as well as the other legal and regulatory requirements. This forms part of an integrated whole and is indivisible. We have been appointed as Statutory auditor by the General meeting d.d. 19 May 2021, following the proposal formulated by the Board of directors and following the recommendation by the Audit committee. Our mandate will expire on the date of the General meeting which will deliberate on the annual accounts for the year ended 31 December 2023. We have performed the statutory audit of the Company’s annual accounts for four consecutive years. Report on the annual accounts Unqualified opinion We have performed the statutory audit of the Company’s annual accounts, which comprise the balance sheet as at 31 December 2021, and the profit and loss account for the year then ended, and the notes to the annual accounts, characterised by a balance sheet total of EUR 10,140,476,675 and a profit and loss account showing a profit for the year of EUR 505,171,770. In our opinion, the annual accounts give a true and fair view of the Company’s net equity and financial position as at 31 December 2021, and of its results for the year then ended, in accordance with the financial-reporting framework applicable in Belgium. Basis for unqualified opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Belgium. Furthermore, we have applied the International Standards on Auditing as approved by the IAASB which are applicable to the year-end and which are not yet approved at the national level. Our responsibilities under those standards are further described in the “Statutory auditor’s responsibilities for the audit of the annual accounts” section of our report. We have fulfilled our ethical responsibilities in accordance with the ethical requirements that are relevant to our audit of the annual accounts in Belgium, including the requirements related to independence. We have obtained from the Board of directors and Company officials the explanations and information necessary for performing our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Statutory Auditor’s Report 305 | 240 Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the annual accounts of the current period. These matters were addressed in the context of our audit of the annual accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Adequacy of the amount of the technical provisions Description of the key audit matter As per 31 December 2021, the technical provisions amount to EUR 1,562,792,214. For detailed information regarding the valuation of the technical provisions, please refer to Note 20 to the annual accounts (point “technical provisions”). The provisions are determined based on the information communicated by ceding companies, which are mainly subsidiaries of the Company. The adequacy test of technical provisions is based on actuarial techniques. It is relatively complex in that it is based on a number of assumptions that require significant judgement regarding future events. The latter may be influenced by future economic or business conditions as well as by laws and regulations specific to the insurance sector. The assumptions used within the adequacy test depend mainly on the amounts paid for claims, the number of claims incurred but not yet reported and claims expenses. The aforementioned different elements, combined with the possible uncertainty related to modelling techniques and the discretionary nature of the assumptions used in the adequacy test, are the main reasons why we considered this topic as a key audit matter. Our audit procedures related to the key audit matter We carried out verifications regarding the operational effectiveness of the controls implemented by the subsidiaries of the Company in order to ensure the quality of the data used within the adequacy test of technical provisions. We have independently recalculated the best estimate of claims reserves based on recognised actuarial techniques. We then compared our results with those of the Company and obtained satisfying documentation regarding the significant differences observed. Finally, we corroborated our conclusions with the Company’s actuarial function. Based on the aforementioned audit procedures, we believe that the assumptions used in the adequacy test of technical provisions are reasonable in relation to the current market conditions and the technical results of the past financial year. Responsibilities of the Board of directors for the preparation of the annual accounts The Board of directors is responsible for the preparation of annual accounts that give a true and fair view in accordance with the financial- reporting framework applicable in Belgium, and for such internal control as the Board of directors determines is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error. In preparing the annual accounts, the Board of directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and 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. 305 Ageas Annual Report 2021 306 | 240 Statutory auditor’s responsibilities for the audit of the annual accounts Our objectives are to obtain reasonable assurance about whether the annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts. In performing our audit, we comply with the legal, regulatory and normative framework applicable to the audit of the annual accounts in Belgium. A statutory audit does not provide any assurance as to the Company’s future viability nor as to the efficiency or effectiveness of the Board of directors’ current or future business management. Our responsibilities in respect of the use of the going concern basis of accounting by the Board of directors are described below. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:  identify and assess the risks of material misstatement of the annual accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain 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 one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.  obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of directors. • conclude on the appropriateness of the Board of directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Statutory auditor’s report to the related disclosures in the annual accounts 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 Statutory auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • evaluate the overall presentation, structure and content of the annual accounts, including the disclosures, and whether the annual accounts represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Audit committee 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. We also provide the Audit committee 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. From the matters communicated with the Audit committee, we determine those matters that were of most significance in the audit of the annual accounts 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. Other legal and regulatory requirements Responsibilities of the Board of directors The Board of directors is responsible for the preparation and the content of the directors’ report, of the documents required to be deposited by virtue of the legal and regulatory requirements, as well as for the compliance with the legal and regulatory requirements regarding bookkeeping, with the Companies’ and Associations’ Code and the Company’s articles of association. Statutory auditor’s responsibilities In the context of our engagement and in accordance with the Belgian standard which is complementary to the International Standards on Auditing (ISAs) as applicable in Belgium, our responsibility is to verify, in all material respects, the directors’ report, certain documents required to be deposited by virtue of legal and regulatory requirements, as well as compliance with the articles of association and of certain requirements of the Companies’ and Associations’ Code, and to report on these matters. 307 | 240 Aspects related to the directors’ report In our opinion, after having performed specific procedures in relation to the directors’ report, the directors’ report is consistent with the annual accounts for the year under audit, and it is prepared in accordance with the articles 3:5 and 3:6 of the Companies’ and Associations’ Code. In the context of our audit of the annual accounts, we are also responsible for considering, in particular based on the knowledge acquired resulting from the audit, whether the directors’ report is materially misstated or contains information which is inadequately disclosed or otherwise misleading. In light of the procedures we have performed, there are no material misstatements we have to report to you. The non-financial information required by virtue of article 3:6, §4 of the Companies’ and Associations’ Code is included in the directors’ report. The Company has prepared the non-financial information, based on the United Nations « Sustainable Development Goals ». However, in accordance with article 3:75, §1, 6° of the Companies’ and Associations’ Code, we do not express an opinion as to whether the non-financial information has been prepared in accordance with said framework as disclosed in the director’s report to the annual accounts. Statement related to the social balance sheet The social balance sheet, to be deposited in accordance with article 3:12, §1, 8° of the Companies’ and Associations’ Code, includes, both in terms of form and content, the information required under this Code, including, but not limited to, in relation to salaries and education, and does not present any material inconsistencies with the information we have at our disposition in our engagement. Statements related to independence  Our registered audit firm and our network did not provide services which are incompatible with the statutory audit of the annual accounts and our registered audit firm remained independent of the Company in the course of our mandate.  The fees for additional services which are compatible with the statutory audit of the annual accounts referred to in article 3:65 of the Companies’ and Associations’ Code are correctly disclosed and itemised in the notes to the annual accounts. Other statements  Without prejudice to formal aspects of minor importance, the accounting records were maintained in accordance with the legal and regulatory requirements applicable in Belgium.  The appropriation of results proposed to the general meeting complies with the legal provisions and the provisions of the articles of association.  There are no transactions undertaken or decisions taken in breach of the Company‘s articles of association or the Companies’ and Associations’ Code that we have to report to you.  This report is consistent with the additional report to the Audit committee referred to in article 79 of the law of 13 March 2016 on the legal status and supervision of insurance or reinsurance companies, which makes reference to article 11 of the Regulation (EU) N° 537/2014.  We have evaluated the property effects resulting from the decisions of the Board of directors dated 23 February 2021 and 9 November 2021 as described in the section “Conflict of interest” included in the annual report and we have no remarks to make in this respect. Diegem, 29 March 2022 The Statutory auditor PwC Reviseurs d’Entreprises SRL / PwC Bedrijfsrevisoren BV Represented by Roland Jeanquart Kurt Cappoen Réviseur d’Entreprises Réviseur d’Entreprises / Bedrijfsrevisor Bedrijfsrevisor AGEAS SA/NV STATUTORY ACCOUNTS 2021 306 Ageas Annual Report 2021 306 | 240 Statutory auditor’s responsibilities for the audit of the annual accounts Our objectives are to obtain reasonable assurance about whether the annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts. In performing our audit, we comply with the legal, regulatory and normative framework applicable to the audit of the annual accounts in Belgium. A statutory audit does not provide any assurance as to the Company’s future viability nor as to the efficiency or effectiveness of the Board of directors’ current or future business management. Our responsibilities in respect of the use of the going concern basis of accounting by the Board of directors are described below. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:  identify and assess the risks of material misstatement of the annual accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain 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 one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.  obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of directors. • conclude on the appropriateness of the Board of directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Statutory auditor’s report to the related disclosures in the annual accounts 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 Statutory auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • evaluate the overall presentation, structure and content of the annual accounts, including the disclosures, and whether the annual accounts represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Audit committee 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. We also provide the Audit committee 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. From the matters communicated with the Audit committee, we determine those matters that were of most significance in the audit of the annual accounts 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. Other legal and regulatory requirements Responsibilities of the Board of directors The Board of directors is responsible for the preparation and the content of the directors’ report, of the documents required to be deposited by virtue of the legal and regulatory requirements, as well as for the compliance with the legal and regulatory requirements regarding bookkeeping, with the Companies’ and Associations’ Code and the Company’s articles of association. Statutory auditor’s responsibilities In the context of our engagement and in accordance with the Belgian standard which is complementary to the International Standards on Auditing (ISAs) as applicable in Belgium, our responsibility is to verify, in all material respects, the directors’ report, certain documents required to be deposited by virtue of legal and regulatory requirements, as well as compliance with the articles of association and of certain requirements of the Companies’ and Associations’ Code, and to report on these matters. 307 | 240 Aspects related to the directors’ report In our opinion, after having performed specific procedures in relation to the directors’ report, the directors’ report is consistent with the annual accounts for the year under audit, and it is prepared in accordance with the articles 3:5 and 3:6 of the Companies’ and Associations’ Code. In the context of our audit of the annual accounts, we are also responsible for considering, in particular based on the knowledge acquired resulting from the audit, whether the directors’ report is materially misstated or contains information which is inadequately disclosed or otherwise misleading. In light of the procedures we have performed, there are no material misstatements we have to report to you. The non-financial information required by virtue of article 3:6, §4 of the Companies’ and Associations’ Code is included in the directors’ report. The Company has prepared the non-financial information, based on the United Nations « Sustainable Development Goals ». However, in accordance with article 3:75, §1, 6° of the Companies’ and Associations’ Code, we do not express an opinion as to whether the non-financial information has been prepared in accordance with said framework as disclosed in the director’s report to the annual accounts. Statement related to the social balance sheet The social balance sheet, to be deposited in accordance with article 3:12, §1, 8° of the Companies’ and Associations’ Code, includes, both in terms of form and content, the information required under this Code, including, but not limited to, in relation to salaries and education, and does not present any material inconsistencies with the information we have at our disposition in our engagement. Statements related to independence  Our registered audit firm and our network did not provide services which are incompatible with the statutory audit of the annual accounts and our registered audit firm remained independent of the Company in the course of our mandate.  The fees for additional services which are compatible with the statutory audit of the annual accounts referred to in article 3:65 of the Companies’ and Associations’ Code are correctly disclosed and itemised in the notes to the annual accounts. Other statements  Without prejudice to formal aspects of minor importance, the accounting records were maintained in accordance with the legal and regulatory requirements applicable in Belgium.  The appropriation of results proposed to the general meeting complies with the legal provisions and the provisions of the articles of association.  There are no transactions undertaken or decisions taken in breach of the Company‘s articles of association or the Companies’ and Associations’ Code that we have to report to you.  This report is consistent with the additional report to the Audit committee referred to in article 79 of the law of 13 March 2016 on the legal status and supervision of insurance or reinsurance companies, which makes reference to article 11 of the Regulation (EU) N° 537/2014.  We have evaluated the property effects resulting from the decisions of the Board of directors dated 23 February 2021 and 9 November 2021 as described in the section “Conflict of interest” included in the annual report and we have no remarks to make in this respect. Diegem, 29 March 2022 The Statutory auditor PwC Reviseurs d’Entreprises SRL / PwC Bedrijfsrevisoren BV Represented by Roland Jeanquart Kurt Cappoen Réviseur d’Entreprises Réviseur d’Entreprises / Bedrijfsrevisor Bedrijfsrevisor 307 Ageas Annual Report 2021 222 | 240 Aspects related to the directors’ report In our opinion, after having performed specific procedures in relation to the directors’ report, the directors’ report is consistent with the annual accounts for the year under audit, and it is prepared in accordance with the articles 3:5 and 3:6 of the Companies’ and Associations’ Code. In the context of our audit of the annual accounts, we are also responsible for considering, in particular based on the knowledge acquired resulting from the audit, whether the directors’ report is materially misstated or contains information which is inadequately disclosed or otherwise misleading. In light of the procedures we have performed, there are no material misstatements we have to report to you. The non-financial information required by virtue of article 3:6, §4 of the Companies’ and Associations’ Code is included in the directors’ report. The Company has prepared the non-financial information, based on the United Nations “Sustainable Development Goals”. However, in accordance with article 3:75, §1, 6° of the Companies’ and Associations’ Code, we do not express an opinion as to whether the non-financial information has been prepared in accordance with said framework as disclosed in the directors’ report to the annual accounts. Statement related to the social balance sheet The social balance sheet, to be deposited in accordance with article 3:12, §1, 8° of the Companies’ and Associations’ Code, includes, both in terms of form and content, the information required under this Code, including, but not limited to, in relation to salaries and education, and does not present any material inconsistencies with the information we have at our disposition in our engagement. Statements related to independence  Our registered audit firm and our network did not provide services which are incompatible with the statutory audit of the annual accounts and our registered audit firm remained independent of the Company in the course of our mandate.  The fees for additional services which are compatible with the statutory audit of the annual accounts referred to in article 3:65 of the Companies’ and Associations’ Code are correctly disclosed and itemized in the notes to the annual accounts. Other statements  Without prejudice to formal aspects of minor importance, the accounting records were maintained in accordance with the legal and regulatory requirements applicable in Belgium.  The appropriation of results proposed to the general meeting complies with the legal provisions and the provisions of the articles of association.  There are no transactions undertaken or decisions taken in breach of the Company‘s articles of association or the Companies’ and Associations’ Code that we have to report to you.  This report is consistent with the additional report to the Audit committee referred to in article 79 of the law of 13 March 2016 on the legal status and supervision of insurance or reinsurance companies, which makes reference to article 11 of the Regulation (EU) N° 537/2014.  We have evaluated the property effects resulting from the decisions of the Board of directors dated 18 February 2020, 20 August 2020, 15 September 2020 and 12 November 2020 as described in the section “Conflict of interest” included in the annual report and we have no remarks to make in this respect. Sint-Stevens-Woluwe, 30 March 2021 The Statutory auditor PwC Reviseurs d’Entreprises SRL / PwC Bedrijfsrevisoren BV Represented by Roland Jeanquart Réviseur d’Entreprises / Bedrijfsrevisor Kurt Cappoen Réviseur d’Entreprises / Bedrijfsrevisor 309 | 240 Some of the statements contained in this Annual Report, including but not limited to the statements made in the sections entitled Message to the Shareholders, Description of Activities and Report of the Board of Directors and in note 5 Risk management, refer to future expectations and other forward-looking perceptions that are based on management’s current views, estimates and assumptions concerning future events. These forward-looking statements are subject to certain risks and uncertainties, which means actual results, performance or events may differ substantially from what those statements express or imply, including but not limited to our expectations regarding the level of provisions relating to our credit and investment portfolios. Other more general factors that may impact our results include but are not limited to:  general economic conditions;  changes in interest rates and the performance of financial markets;  frequency and severity of insured loss events;  mortality, morbidity and persistency levels and trends;  foreign exchange rates, including euro / US dollar exchange rate;  changes in competitive and pricing environments, including increasing competition in Belgium;  changes in domestic and foreign legislation, regulations and taxes;  regional or general changes in asset valuations;  occurrence of significant natural or other disasters;  inability to economically reinsure certain risks;  adequacy of loss reserves;  regulatory changes relating to the insurance, investment and/or securities industries;  changes in the policies of central banks and/or foreign governments;  general competitive factors on a global, regional and/or national scale. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Forward-looking statements to be treated with caution OTHER INFORMATION 308 Ageas Annual Report 2021 H Other information 309 | 240 Some of the statements contained in this Annual Report, including but not limited to the statements made in the sections entitled Message to the Shareholders, Description of Activities and Report of the Board of Directors and in note 5 Risk management, refer to future expectations and other forward-looking perceptions that are based on management’s current views, estimates and assumptions concerning future events. These forward-looking statements are subject to certain risks and uncertainties, which means actual results, performance or events may differ substantially from what those statements express or imply, including but not limited to our expectations regarding the level of provisions relating to our credit and investment portfolios. Other more general factors that may impact our results include but are not limited to:  general economic conditions;  changes in interest rates and the performance of financial markets;  frequency and severity of insured loss events;  mortality, morbidity and persistency levels and trends;  foreign exchange rates, including euro / US dollar exchange rate;  changes in competitive and pricing environments, including increasing competition in Belgium;  changes in domestic and foreign legislation, regulations and taxes;  regional or general changes in asset valuations;  occurrence of significant natural or other disasters;  inability to economically reinsure certain risks;  adequacy of loss reserves;  regulatory changes relating to the insurance, investment and/or securities industries;  changes in the policies of central banks and/or foreign governments;  general competitive factors on a global, regional and/or national scale. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Forward-looking statements to be treated with caution 309 Ageas Annual Report 2021 H Other information Forward-looking statements to be treated with caution 310 | 240 The Articles of Association of ageas SA/NV can be inspected at the Registry of the Commercial Court in Brussels (ageas SA/NV) and at the company’s registered office. The Annual Report is filed with the National Bank of Belgium (ageas SA/NV). Resolutions on the (re)election and removal of Ageas Board members are published in annexes to the Belgian Law Gazette (ageas SA/NV) and elsewhere. Financial reports on the company and notices convening AGMs and EGMs are published in the financial press, and other newspapers and periodicals. The Annual Report, as well as a list of all participations of Ageas, are available at the company’s registered office in Brussels free of charge to all shareholders and to any interested third party. The Annual Report is also filed with the National Bank of Belgium. The Annual Report is sent in paper only to registered shareholders upon their explicit request and is available on the website of Ageas. Provision of information to shareholders and investors Listed shares Ageas shares are currently listed on Euronext Brussels. Ageas also has a sponsored ADR programme in the United States. Types of shares Shares in Ageas may be registered or dematerialised shares. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Availability of company documents for public inspection 311 | 240 The company offers shareholders the opportunity to register their securities free of charge in dematerialised form. Ageas has developed a rapid conversion process for securities in the form of dematerialised shares, enabling delivery at short notice. ageas SA/NV, Corporate Administration Rue du Marquis 1, 1000 Brussels, Belgium E-mail: [email protected] Information and communications The company sends communications to holders of registered dematerialised shares free of charge, including the annual report. The company personally invites each holder of dematerialised shares registered with the company to attend General Meetings and provides them with the agenda, the proposed resolutions as well as proxies for their representation and participation in the voting. On the date that payment of the dividend becomes due, the company automatically pays the amount of the dividend due into the bank accounts indicated by the holders of dematerialised shares registered with the company. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Registration of shares in dematerialised form OTHER INFORMATION 310 Ageas Annual Report 2021 Availability of company documents for public inspection 310 | 240 The Articles of Association of ageas SA/NV can be inspected at the Registry of the Commercial Court in Brussels (ageas SA/NV) and at the company’s registered office. The Annual Report is filed with the National Bank of Belgium (ageas SA/NV). Resolutions on the (re)election and removal of Ageas Board members are published in annexes to the Belgian Law Gazette (ageas SA/NV) and elsewhere. Financial reports on the company and notices convening AGMs and EGMs are published in the financial press, and other newspapers and periodicals. The Annual Report, as well as a list of all participations of Ageas, are available at the company’s registered office in Brussels free of charge to all shareholders and to any interested third party. The Annual Report is also filed with the National Bank of Belgium. The Annual Report is sent in paper only to registered shareholders upon their explicit request and is available on the website of Ageas. Provision of information to shareholders and investors Listed shares Ageas shares are currently listed on Euronext Brussels. Ageas also has a sponsored ADR programme in the United States. Types of shares Shares in Ageas may be registered or dematerialised shares. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Availability of company documents for public inspection 311 | 240 The company offers shareholders the opportunity to register their securities free of charge in dematerialised form. Ageas has developed a rapid conversion process for securities in the form of dematerialised shares, enabling delivery at short notice. ageas SA/NV, Corporate Administration Rue du Marquis 1, 1000 Brussels, Belgium E-mail: [email protected] Information and communications The company sends communications to holders of registered dematerialised shares free of charge, including the annual report. The company personally invites each holder of dematerialised shares registered with the company to attend General Meetings and provides them with the agenda, the proposed resolutions as well as proxies for their representation and participation in the voting. On the date that payment of the dividend becomes due, the company automatically pays the amount of the dividend due into the bank accounts indicated by the holders of dematerialised shares registered with the company. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Registration of shares in dematerialised form 311 Ageas Annual Report 2021 Registration of shares in dematerialised form 312 | 240 The GRI Content Index provides an overview of material sustainability related disclosures contained in the Ageas Annual Report 2021 as well as on the website, if deemed relevant. Ageas reports in accordance with the Global Reporting Initiative’s GRI Standards: core option. This entails that at least one indicator for the material topics is included, unless otherwise stated. In case more indicators are reported upon, these are also included in the table. AGEAS - GRI CONTENT INDEX - OPTION CORE GRI standard reference Disclosure Section in the annual report 2021 (AR) GRI 101 - Foundation GRI 102 - General disclosure Organisational profile 102-1 Name of the organisation AR Frontpage and first page of the annual report 102-2 Activities, brands, products, and services AR Website A Report of Board of Directors - 3 Strategy and business model of Ageas https://www.ageas.com/about/company 102-3 Location of headquarters AR C General notes - 1 Legal structure 102-4 Location of operations AR Website A Report of Board of Directors - 3 Strategy and business model of Ageas https://www.ageas.com/about/company 102-5 Ownership and legal form AR C General notes - 1 Legal structure 102-6 Markets served AR A Report of Board of Directors - 3 Strategy and business model of Ageas 102-7 Scale of the organisation AR A Report of Board of Directors - 2 Developments and results A Report of Board of Directors - 3 Strategy and business model of Ageas A Report of Board of Directors - 4.2 Our customers and partners A Report of Board of Directors - 4.3 Our employees B Consolidated financial statements 102-8 Information on employees and other workers AR A Report of Board of Directors - 4.3 Our employees 102-9 Supply chain AR A Report of Board of Directors - 3 Strategy and business model of Ageas 102-10 Significant changes to the organisation and its supply chain Not applicable 102-11 Precautionary Principle or approach AR C General notes - 4 Risk Management 102-12 External initiatives PRI, PSI, UN Global Compact 102-13 Membership of associations Lobbying and membership disclosure 2021 on https://sustainability.ageas.com/reporting Strategy 102-14 Statement from senior decision-maker AR A Report of Board of Directors - 1 Message from CEO and Chairman Ethics and integrity 102-16 Values, principles, standards, and norms of behaviour AR A Report of Board of Directors - 4.3 Our employees A Report of Board of Directors - 4.7 Safe, secure and compliant insurance A Report of Board of Directors - 5 Corporate governance statement C General notes - 4 Risk management Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). GRI Index 313 | 240 GRI standard reference Disclosure Section in the annual report 2021 (AR) Governance 102-18 Governance structure AR A Report of Board of Directors - 5 Corporate governance statement C General notes - 1 Legal structure Stakeholder engagement 102-40 List of stakeholder groups AR A Report of Board of Directors - 4.1 Embedding sustainability in our business 102-41 Collective bargaining agreements Website Guidance on human and labour rights - https://sustainability.ageas.com/reporting 102-42 Identifying and selecting stakeholders AR A Report of Board of Directors - 4.1 Embedding sustainability in our business 102-43 Approach to stakeholder engagement AR A Report of Board of Directors - 4.1 Embedding sustainability in our business 102-44 Key topics and concerns raised AR A Report of Board of Directors - 4.1 Embedding sustainability in our business Reporting practice 102-45 Entities included in the consolidated financial statements AR C General notes - 1 Legal structure 102-46 Defining report content and topic boundaries AR A Report of Board of Directors - 4.1 Embedding sustainability in our business 102-47 List of material topics AR A Report of Board of Directors - 4.1 Embedding sustainability in our business 102-48 Restatements of information Not applicable 102-49 Changes in reporting Not applicable 102-50 Reporting period AR A Report of Board of Directors - first page 102-51 Date of most recent report Website Investors : quarterly results - https://www.ageas.com/investors/quarterly-results 102-52 Reporting cycle AR A Report of Board of Directors - first page 102-53 Contact point for questions regarding the report Website Investor relations - https://www.ageas.com/contact/investors-relations 102-54 Claims of reporting in accordance with the GRI Standards AR A Report of Board of Directors - first page 102-55 GRI content index AR H. Other information - GRI content index 102-56 External assurance Not applicable GRI 103 - Management approach 103-1 Explanation of the material topic and its Boundary AR A Report of Board of Directors - 4.1 Embedding sustainability in our business Economic 201 - Economic performance 103-2 Management approach AR A Report of Board of Directors - 3 Strategy and business model of Ageas A Report of Board of Directors - 4.7 Safe, secure and compliant insurance A Report of Board of Directors - 5 Corporate governance statement C General notes - 4 Risk management 103-3 Evaluation of the management approach AR A Report of Board of Directors - 5 Corporate governance statement 201-1 Direct economic value generated and distributed AR A Report of Board of Directors - 2 Key financials and highlights B Consolidated financial statements 2020 - Consolidated income statement C General notes - 8 Information on operating segments E Notes to the Consolidated Income Statement 201-3 Defined benefit plan obligations and other retirement plans AR C General notes - 6 Remuneration and benefits - section 6.1 203 - Indirect economic impacts 103-2 Management approach AR A Report of Board of Directors – 4.5 Our society A Report of Board of Directors - 5 Corporate governance statement C General notes - 4 Risk management 103-3 Evaluation of the management approach AR A Report of Board of Directors - 5 Corporate governance statement 203-1 Infrastructure investments and services supported AR A Report of Board of Directors - 4.5 Our society 205 - Anti-corruption 103-2 Management approach AR A Report of Board of Directors - 4.7 Safe, secure and compliant insurance A Report of Board of Directors - 5 Corporate governance statement C General notes - 4 Risk management 103-3 Evaluation of the management approach AR A Report of Board of Directors - 4.7 Safe, secure and compliant insurance A Report of Board of Directors - 5 Corporate governance statement 205-2 Communication and training about anti-corruption policies and procedures AR A Report of Board of Directors - 4.7 Safe, secure and compliant insurance OTHER INFORMATION 312 Ageas Annual Report 2021 GRI Index 312 | 240 The GRI Content Index provides an overview of material sustainability related disclosures contained in the Ageas Annual Report 2021 as well as on the website, if deemed relevant. Ageas reports in accordance with the Global Reporting Initiative’s GRI Standards: core option. This entails that at least one indicator for the material topics is included, unless otherwise stated. In case more indicators are reported upon, these are also included in the table. AGEAS - GRI CONTENT INDEX - OPTION CORE GRI standard reference Disclosure Section in the annual report 2021 (AR) GRI 101 - Foundation GRI 102 - General disclosure Organisational profile 102-1 Name of the organisation AR Frontpage and first page of the annual report 102-2 Activities, brands, products, and services AR Website A Report of Board of Directors - 3 Strategy and business model of Ageas https://www.ageas.com/about/company 102-3 Location of headquarters AR C General notes - 1 Legal structure 102-4 Location of operations AR Website A Report of Board of Directors - 3 Strategy and business model of Ageas https://www.ageas.com/about/company 102-5 Ownership and legal form AR C General notes - 1 Legal structure 102-6 Markets served AR A Report of Board of Directors - 3 Strategy and business model of Ageas 102-7 Scale of the organisation AR A Report of Board of Directors - 2 Developments and results A Report of Board of Directors - 3 Strategy and business model of Ageas A Report of Board of Directors - 4.2 Our customers and partners A Report of Board of Directors - 4.3 Our employees B Consolidated financial statements 102-8 Information on employees and other workers AR A Report of Board of Directors - 4.3 Our employees 102-9 Supply chain AR A Report of Board of Directors - 3 Strategy and business model of Ageas 102-10 Significant changes to the organisation and its supply chain Not applicable 102-11 Precautionary Principle or approach AR C General notes - 4 Risk Management 102-12 External initiatives PRI, PSI, UN Global Compact 102-13 Membership of associations Lobbying and membership disclosure 2021 on https://sustainability.ageas.com/reporting Strategy 102-14 Statement from senior decision-maker AR A Report of Board of Directors - 1 Message from CEO and Chairman Ethics and integrity 102-16 Values, principles, standards, and norms of behaviour AR A Report of Board of Directors - 4.3 Our employees A Report of Board of Directors - 4.7 Safe, secure and compliant insurance A Report of Board of Directors - 5 Corporate governance statement C General notes - 4 Risk management Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). GRI Index 313 | 240 GRI standard reference Disclosure Section in the annual report 2021 (AR) Governance 102-18 Governance structure AR A Report of Board of Directors - 5 Corporate governance statement C General notes - 1 Legal structure Stakeholder engagement 102-40 List of stakeholder groups AR A Report of Board of Directors - 4.1 Embedding sustainability in our business 102-41 Collective bargaining agreements Website Guidance on human and labour rights - https://sustainability.ageas.com/reporting 102-42 Identifying and selecting stakeholders AR A Report of Board of Directors - 4.1 Embedding sustainability in our business 102-43 Approach to stakeholder engagement AR A Report of Board of Directors - 4.1 Embedding sustainability in our business 102-44 Key topics and concerns raised AR A Report of Board of Directors - 4.1 Embedding sustainability in our business Reporting practice 102-45 Entities included in the consolidated financial statements AR C General notes - 1 Legal structure 102-46 Defining report content and topic boundaries AR A Report of Board of Directors - 4.1 Embedding sustainability in our business 102-47 List of material topics AR A Report of Board of Directors - 4.1 Embedding sustainability in our business 102-48 Restatements of information Not applicable 102-49 Changes in reporting Not applicable 102-50 Reporting period AR A Report of Board of Directors - first page 102-51 Date of most recent report Website Investors : quarterly results - https://www.ageas.com/investors/quarterly-results 102-52 Reporting cycle AR A Report of Board of Directors - first page 102-53 Contact point for questions regarding the report Website Investor relations - https://www.ageas.com/contact/investors-relations 102-54 Claims of reporting in accordance with the GRI Standards AR A Report of Board of Directors - first page 102-55 GRI content index AR H. Other information - GRI content index 102-56 External assurance Not applicable GRI 103 - Management approach 103-1 Explanation of the material topic and its Boundary AR A Report of Board of Directors - 4.1 Embedding sustainability in our business Economic 201 - Economic performance 103-2 Management approach AR A Report of Board of Directors - 3 Strategy and business model of Ageas A Report of Board of Directors - 4.7 Safe, secure and compliant insurance A Report of Board of Directors - 5 Corporate governance statement C General notes - 4 Risk management 103-3 Evaluation of the management approach AR A Report of Board of Directors - 5 Corporate governance statement 201-1 Direct economic value generated and distributed AR A Report of Board of Directors - 2 Key financials and highlights B Consolidated financial statements 2020 - Consolidated income statement C General notes - 8 Information on operating segments E Notes to the Consolidated Income Statement 201-3 Defined benefit plan obligations and other retirement plans AR C General notes - 6 Remuneration and benefits - section 6.1 203 - Indirect economic impacts 103-2 Management approach AR A Report of Board of Directors – 4.5 Our society A Report of Board of Directors - 5 Corporate governance statement C General notes - 4 Risk management 103-3 Evaluation of the management approach AR A Report of Board of Directors - 5 Corporate governance statement 203-1 Infrastructure investments and services supported AR A Report of Board of Directors - 4.5 Our society 205 - Anti-corruption 103-2 Management approach AR A Report of Board of Directors - 4.7 Safe, secure and compliant insurance A Report of Board of Directors - 5 Corporate governance statement C General notes - 4 Risk management 103-3 Evaluation of the management approach AR A Report of Board of Directors - 4.7 Safe, secure and compliant insurance A Report of Board of Directors - 5 Corporate governance statement 205-2 Communication and training about anti-corruption policies and procedures AR A Report of Board of Directors - 4.7 Safe, secure and compliant insurance 313 Ageas Annual Report 2021 314 | 240 GRI standard reference Disclosure Section in the annual report 2021 (AR) 207 - Tax 103-2 Management approach AR Website A Report of Board of Directors - 5 Corporate governance statement Tax policy - https://sustainability.ageas.com/reporting 103-3 Evaluation of the management approach AR A Report of Board of Directors - 5 Corporate governance statement 207-4 Country-by-country reporting AR A Report of Board of Directors - 4.5 Our society Environmental 305 - Emissions 103-2 Management approach AR A Report of Board of Directors - 4.1 Embedding sustainability in our business A Report of Board of Directors – 4.5 Ou society 103-3 Evaluation of the management approach AR A Report of Board of Directors - 5 Corporate governance statement 305-1 Direct (Scope 1) GHG emissions AR A Report of Board of Directors - 4.5 Our society 305-2 Energy indirect (Scope 2) GHG emissions AR A Report of Board of Directors - 4.5 Our society 305-3 Other indirect (Scope 3) GHG emissions AR A Report of Board of Directors - 4.5 Our society 305-4 GHG emissions intensity AR A Report of Board of Directors - 4.5 Our society Social 103-2 Management approach AR A Report of Board of Directors - 4.1 Embedding sustainability in our business A Report of Board of Directors - 4.3 Our employees A Report of Board of Directors - 5 Corporate governance statement 103-3 Evaluation of the management approach AR A Report of Board of Directors - 5 Corporate governance statement 403 - Occupational Health and Safety 403-6 Promotion of worker health AR A Report of Board of Directors - 4.3 Our employees 404 - Training and education 404-2 Programs for upgrading employee skills and transition assistance programs AR A Report of Board of Directors - 4.3 Our employees 405 - Diversity and equal opportunity 405-1 Diversity of governance bodies and employees AR A Report of Board of Directors - 4.3 Our employees A Report of Board of Directors - 5 Corporate governance statement Other material topics 103-2 Management approach AR A Report of Board of Directors - 4.1 Embedding sustainability in our business A Report of Board of Directors - 4.2 Our customers and partners A Report of Board of Directors - 5 Corporate governance statement 103-3 Evaluation of the management approach A Report of Board of Directors - 5 Corporate governance statement Insurance products and services protecting against societal challenges AR In addition to GR302 Target determined in strategy Impact24: Percentage of GWP from products that stimulate the transition to a more sustainable world First reporting over 2022 - https://strategy.ageas.com/impact24/report/impact24 Insurance products and services incentivising responsible behaviour AR In addition to GR302 Target determined in strategy Impact24: Percentage of GWP from products that stimulate the transition to a more sustainable world First reporting over 2022 - https://strategy.ageas.com/impact24/report/impact24 Easy to understand, fair and transparent information to customers AR In addition to GR302 Target determined in strategy Impact24: Percentage of products that have been reviewed for transparency First reporting over 2022 - https://strategy.ageas.com/impact24/report/impact24 315 | 240 Ageas has been a signatory of the United Nations Global Compact since August 2020. Ageas is committed to supporting the Ten Principles of the UN Global Compact relating to Human Rights, labour standards, the environment and the fight against corruption as well as reporting and communicating annually to its stakeholders on progress made to implement these principles. Our newly launched Impact24 Strategy reaffirms our commitments to the Ten Principles of the UN Global Compact. Ageas issued its first progress report in September 2021 8 in which a summary was provided on the who of Ageas and the status at that moment. As from the second report, Ageas is and will be reporting on the progress made during the year, timing aligned with the Annual Report. This confirms our belief that non-financial information such as this progress report is equally important as financial information. The table below contains information and detailed references to material in the 2021 Ageas Annual Report or on the Ageas sustainability webpages that addresses the UN Global Compact principles. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). UN GC Progress report Index 8 https://headless-api.ageas.com/sites/default/files/2021- 09/2020%20UN%20Global%20Compact%20progress%20report_0.pdf OTHER INFORMATION 314 Ageas Annual Report 2021 314 | 240 GRI standard reference Disclosure Section in the annual report 2021 (AR) 207 - Tax 103-2 Management approach AR Website A Report of Board of Directors - 5 Corporate governance statement Tax policy - https://sustainability.ageas.com/reporting 103-3 Evaluation of the management approach AR A Report of Board of Directors - 5 Corporate governance statement 207-4 Country-by-country reporting AR A Report of Board of Directors - 4.5 Our society Environmental 305 - Emissions 103-2 Management approach AR A Report of Board of Directors - 4.1 Embedding sustainability in our business A Report of Board of Directors – 4.5 Ou society 103-3 Evaluation of the management approach AR A Report of Board of Directors - 5 Corporate governance statement 305-1 Direct (Scope 1) GHG emissions AR A Report of Board of Directors - 4.5 Our society 305-2 Energy indirect (Scope 2) GHG emissions AR A Report of Board of Directors - 4.5 Our society 305-3 Other indirect (Scope 3) GHG emissions AR A Report of Board of Directors - 4.5 Our society 305-4 GHG emissions intensity AR A Report of Board of Directors - 4.5 Our society Social 103-2 Management approach AR A Report of Board of Directors - 4.1 Embedding sustainability in our business A Report of Board of Directors - 4.3 Our employees A Report of Board of Directors - 5 Corporate governance statement 103-3 Evaluation of the management approach AR A Report of Board of Directors - 5 Corporate governance statement 403 - Occupational Health and Safety 403-6 Promotion of worker health AR A Report of Board of Directors - 4.3 Our employees 404 - Training and education 404-2 Programs for upgrading employee skills and transition assistance programs AR A Report of Board of Directors - 4.3 Our employees 405 - Diversity and equal opportunity 405-1 Diversity of governance bodies and employees AR A Report of Board of Directors - 4.3 Our employees A Report of Board of Directors - 5 Corporate governance statement Other material topics 103-2 Management approach AR A Report of Board of Directors - 4.1 Embedding sustainability in our business A Report of Board of Directors - 4.2 Our customers and partners A Report of Board of Directors - 5 Corporate governance statement 103-3 Evaluation of the management approach A Report of Board of Directors - 5 Corporate governance statement Insurance products and services protecting against societal challenges AR In addition to GR302 Target determined in strategy Impact24: Percentage of GWP from products that stimulate the transition to a more sustainable world First reporting over 2022 - https://strategy.ageas.com/impact24/report/impact24 Insurance products and services incentivising responsible behaviour AR In addition to GR302 Target determined in strategy Impact24: Percentage of GWP from products that stimulate the transition to a more sustainable world First reporting over 2022 - https://strategy.ageas.com/impact24/report/impact24 Easy to understand, fair and transparent information to customers AR In addition to GR302 Target determined in strategy Impact24: Percentage of products that have been reviewed for transparency First reporting over 2022 - https://strategy.ageas.com/impact24/report/impact24 315 | 240 Ageas has been a signatory of the United Nations Global Compact since August 2020. Ageas is committed to supporting the Ten Principles of the UN Global Compact relating to Human Rights, labour standards, the environment and the fight against corruption as well as reporting and communicating annually to its stakeholders on progress made to implement these principles. Our newly launched Impact24 Strategy reaffirms our commitments to the Ten Principles of the UN Global Compact. Ageas issued its first progress report in September 2021 8 in which a summary was provided on the who of Ageas and the status at that moment. As from the second report, Ageas is and will be reporting on the progress made during the year, timing aligned with the Annual Report. This confirms our belief that non-financial information such as this progress report is equally important as financial information. The table below contains information and detailed references to material in the 2021 Ageas Annual Report or on the Ageas sustainability webpages that addresses the UN Global Compact principles. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). UN GC Progress report Index 8 https://headless-api.ageas.com/sites/default/files/2021- 09/2020%20UN%20Global%20Compact%20progress%20report_0.pdf 315 Ageas Annual Report 2021 UN GC Progress report Index 316 | 240 UN Global Compact 10 Principles Ageas's actions in 2021 Reference 1 Human rights PRINCIPLE 1: Businesses should support and respect the protection of internationally proclaimed human rights; and PRINCIPLE 2: Make sure they are not complicit in human rights abuses. Strategy :  Ageas's reconfirmed commitment to SDGs  Launch of Impact24 strategy including targets for sustainable products and investments A.3 A.4.1 Governance:  Sustainability governance as part of the overall Group governance A.4.1 A.5 Policies:  Ageas code of conduct  Update of group procurement policy  Update PRAP  Up-to-date policy framework  Update of Responsible Investment Framework including voting and engagement A.4.7 Website https://sustainability.ageas.com/reporting Monitoring:  First human rights risk assessment  Our customers and partners  Our society - a responsible and sustainable investment strategy  Towards customers - breaches A.4.7 A.4.2 A.4.5 A.4.7 2 Labour principles PRINCIPLE 3: Businesses should uphold freedom of association and the effective recognition of the right to collective bargaining; PRINCIPLE 4: The elimination of all forms of forced and compulsory labour; PRINCIPLE 5: The effective abolition of child labour; and PRINCIPLE 6: The elimination of discrimination in respect of employment and occupation. Strategy :  Ageas's reconfirmed commitment to SDGs  Launch of Impact24 strategy including targets on diversity and training/development of Ageas's employees A.3 A.4.1 Policies:  Ageas code of conduct  Up-to-date policy framework including dedicated policy on diversity and inclusion, and on human and labour rights  Update of group procurement policy A.4.7 Website https://sustainability.ageas.com/reporting Monitoring:  Our employees including human capital related KPIs and pies on employee engagement A.4.3 317 | 240 UN Global Compact 10 Principles Ageas's actions in 2021 Reference 3 Environment PRINCIPLE 7: Businesses should support a precautionary approach to environmental challenges; PRINCIPLE 8: Undertake initiatives to promote greater environmental responsibility; and PRINCIPLE 9: Encourage the development and diffusion of environmentally friendly technologies. Strategy :  Ageas's reconfirmed commitment to SDGs  Launch of Impact24 strategy including targets on sustainable products and investments, and on reduction on CO2 level in own operations and in investments A.3 A.4.1 Policies:  Ageas's code of conduct  Update of Responsible Investment Framework including voting and engagement  New environmental policy  Update of group procurement policy  Update of PRAP A.4.7 Website https://sustainability.ageas.com/reporting Monitoring:  TCFD report  CO2 disclosure  Our customers and partners  Our society - a responsible and sustainable investment strategy  Our society - a stronger focus on environment friendly operations and sustainable operational behaviour including KPIs  EU taxonomy Website https://sustainability.ageas.com/reporting A.4.2 A.4.5 A.4.5 A.4.6 4 Anti-corruption PRINCIPLE 10: Businesses should work against corruption in all its forms, including extortion and bribery. Policies:  Ageas's code of conduct  Up-to-date policy framework including anti-bribery and corruption, anti-money laundering, fit & proper, conflict of interest, …  New policy on lobbying and memberships A.4.7 Website https://sustainability.ageas.com/reporting Monitoring:  Safe, secure and compliant insurance including KPIs  Tax disclosure  Lobbying, policitical contributions and membership disclosure A.4.7 Website https://sustainability.ageas.com/reporting OTHER INFORMATION 316 Ageas Annual Report 2021 316 | 240 UN Global Compact 10 Principles Ageas's actions in 2021 Reference 1 Human rights PRINCIPLE 1: Businesses should support and respect the protection of internationally proclaimed human rights; and PRINCIPLE 2: Make sure they are not complicit in human rights abuses. Strategy :  Ageas's reconfirmed commitment to SDGs  Launch of Impact24 strategy including targets for sustainable products and investments A.3 A.4.1 Governance:  Sustainability governance as part of the overall Group governance A.4.1 A.5 Policies:  Ageas code of conduct  Update of group procurement policy  Update PRAP  Up-to-date policy framework  Update of Responsible Investment Framework including voting and engagement A.4.7 Website https://sustainability.ageas.com/reporting Monitoring:  First human rights risk assessment  Our customers and partners  Our society - a responsible and sustainable investment strategy  Towards customers - breaches A.4.7 A.4.2 A.4.5 A.4.7 2 Labour principles PRINCIPLE 3: Businesses should uphold freedom of association and the effective recognition of the right to collective bargaining; PRINCIPLE 4: The elimination of all forms of forced and compulsory labour; PRINCIPLE 5: The effective abolition of child labour; and PRINCIPLE 6: The elimination of discrimination in respect of employment and occupation. Strategy :  Ageas's reconfirmed commitment to SDGs  Launch of Impact24 strategy including targets on diversity and training/development of Ageas's employees A.3 A.4.1 Policies:  Ageas code of conduct  Up-to-date policy framework including dedicated policy on diversity and inclusion, and on human and labour rights  Update of group procurement policy A.4.7 Website https://sustainability.ageas.com/reporting Monitoring:  Our employees including human capital related KPIs and pies on employee engagement A.4.3 317 | 240 UN Global Compact 10 Principles Ageas's actions in 2021 Reference 3 Environment PRINCIPLE 7: Businesses should support a precautionary approach to environmental challenges; PRINCIPLE 8: Undertake initiatives to promote greater environmental responsibility; and PRINCIPLE 9: Encourage the development and diffusion of environmentally friendly technologies. Strategy :  Ageas's reconfirmed commitment to SDGs  Launch of Impact24 strategy including targets on sustainable products and investments, and on reduction on CO2 level in own operations and in investments A.3 A.4.1 Policies:  Ageas's code of conduct  Update of Responsible Investment Framework including voting and engagement  New environmental policy  Update of group procurement policy  Update of PRAP A.4.7 Website https://sustainability.ageas.com/reporting Monitoring:  TCFD report  CO2 disclosure  Our customers and partners  Our society - a responsible and sustainable investment strategy  Our society - a stronger focus on environment friendly operations and sustainable operational behaviour including KPIs  EU taxonomy Website https://sustainability.ageas.com/reporting A.4.2 A.4.5 A.4.5 A.4.6 4 Anti-corruption PRINCIPLE 10: Businesses should work against corruption in all its forms, including extortion and bribery. Policies:  Ageas's code of conduct  Up-to-date policy framework including anti-bribery and corruption, anti-money laundering, fit & proper, conflict of interest, …  New policy on lobbying and memberships A.4.7 Website https://sustainability.ageas.com/reporting Monitoring:  Safe, secure and compliant insurance including KPIs  Tax disclosure  Lobbying, policitical contributions and membership disclosure A.4.7 Website https://sustainability.ageas.com/reporting 317 Ageas Annual Report 2021 318 | 240 Ageas officially became a signatory to the United Nations Environment Programme Finance Initiative (UNEP FI) Principles for Sustainable Insurance (PSI) on September 15, 2020. This insurance industry initiative encourages an industry-wide commitment to ESG integration. Ageas’s first status report, published in September 2021 9 , provided an overview of the status and progress that made against the main principles of the UNEP FI PSI based on the situation as at June 30, 2021. As a PSI signatory, Ageas will disclose as from now on an annual basis the progress made in embedding the Principles into all aspects of its operations, in line with the timing of its Annual Report. The table below references to the activities Ageas has undertaken in 2021 to demonstrate its commitment to the PSI. Principles of Sustainable Insurance Ageas's actions in 2021 Reference 1 We will embed in our decision-making environmental, social and governance issues relevant to our insurance business.  Launch of Impact24 strategy with first time non-financial targets for sustainable investments, employees and planet, and reconfirmed commitment to the SDGs A.3  Sustainability governance as part of the overall Group governance A.4.1  Continued TCFD implementation and reporting hereon https://sustainability.ageas.com/reporting  Update of or new policies e.g. PRAP, environmental, procurement, lobbying and memberships, Responsible Investment Framework including voting and engagement A.4.5  E-learning on sustainability A.4.3  First human rights risk assessment A.4.7  Actions towards employees and society and monitoring of results by means of KPIs A.4.3 9 https://headless-api.ageas.com/sites/default/files/2021-09/2020%20UNEP%20FI%20PSI%20Progress%20report.pdf Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). UNEP FI PSI Index 319 | 240 Principles of Sustainable Insurance Ageas's actions in 2021 Reference 2 We will work together with our clients and business partners to raise awareness of environmental, social and governance issues, manage risk and develop solutions.  Launch of Impact24 strategy with first time non-financial targets for sustainable products and investments, including action plan for realisation A.3  Continued TCFD implementation and reporting hereon https://sustainability.ageas.com/reporting  Update of policies e.g. PRAP, Responsible Investment Framework including voting and engagement https://sustainability.ageas.com/reporting  Active promotion of sustainable products, such as drive less, green parts, and sustainable investments, including in real estate A.4.2  Active engagement directly and through Action 100+ A.4.5  First disclosure on EU taxonomy A.4.6 3 We will work together with governments, regulators and other key stakeholders to promote widespread action across society on environmental, social and governance issues.  Active promotion of societal related initiatives such as Road Safety, MAZE, disaeases, financial literacy  Establishment of chair at University of Antwerp on Sustainable Insurance  Collaboration with several universities on ethics, insurance,  Collaboration with educational world to support socially vulnerable people  Multiple memberships to actively promote ESG aspects in insurance and in the world e.g. World Economic Forum, commitment to PRI A.4.5 4 We will demonstrate accountability and transparency in regularly disclosing publicly our progress in implementing the Principles.  Annual disclosure in the Ageas's Annual Report in accordance with GRI - core  Thematic disclosures on e.g. TCFD, CO2, taxes, lobbying, memberships, UN GC principles  Responding to several ESG rating agancies, amongst others CDP https://www.ageas.com/investors/quarterly-results https://sustainability.ageas.com/reporting OTHER INFORMATION 318 Ageas Annual Report 2021 UNEP FI PSI Index 318 | 240 Ageas officially became a signatory to the United Nations Environment Programme Finance Initiative (UNEP FI) Principles for Sustainable Insurance (PSI) on September 15, 2020. This insurance industry initiative encourages an industry-wide commitment to ESG integration. Ageas’s first status report, published in September 2021 9 , provided an overview of the status and progress that made against the main principles of the UNEP FI PSI based on the situation as at June 30, 2021. As a PSI signatory, Ageas will disclose as from now on an annual basis the progress made in embedding the Principles into all aspects of its operations, in line with the timing of its Annual Report. The table below references to the activities Ageas has undertaken in 2021 to demonstrate its commitment to the PSI. Principles of Sustainable Insurance Ageas's actions in 2021 Reference 1 We will embed in our decision-making environmental, social and governance issues relevant to our insurance business.  Launch of Impact24 strategy with first time non-financial targets for sustainable investments, employees and planet, and reconfirmed commitment to the SDGs A.3  Sustainability governance as part of the overall Group governance A.4.1  Continued TCFD implementation and reporting hereon https://sustainability.ageas.com/reporting  Update of or new policies e.g. PRAP, environmental, procurement, lobbying and memberships, Responsible Investment Framework including voting and engagement A.4.5  E-learning on sustainability A.4.3  First human rights risk assessment A.4.7  Actions towards employees and society and monitoring of results by means of KPIs A.4.3 9 https://headless-api.ageas.com/sites/default/files/2021-09/2020%20UNEP%20FI%20PSI%20Progress%20report.pdf Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). UNEP FI PSI Index 319 | 240 Principles of Sustainable Insurance Ageas's actions in 2021 Reference 2 We will work together with our clients and business partners to raise awareness of environmental, social and governance issues, manage risk and develop solutions.  Launch of Impact24 strategy with first time non-financial targets for sustainable products and investments, including action plan for realisation A.3  Continued TCFD implementation and reporting hereon https://sustainability.ageas.com/reporting  Update of policies e.g. PRAP, Responsible Investment Framework including voting and engagement https://sustainability.ageas.com/reporting  Active promotion of sustainable products, such as drive less, green parts, and sustainable investments, including in real estate A.4.2  Active engagement directly and through Action 100+ A.4.5  First disclosure on EU taxonomy A.4.6 3 We will work together with governments, regulators and other key stakeholders to promote widespread action across society on environmental, social and governance issues.  Active promotion of societal related initiatives such as Road Safety, MAZE, disaeases, financial literacy  Establishment of chair at University of Antwerp on Sustainable Insurance  Collaboration with several universities on ethics, insurance,  Collaboration with educational world to support socially vulnerable people  Multiple memberships to actively promote ESG aspects in insurance and in the world e.g. World Economic Forum, commitment to PRI A.4.5 4 We will demonstrate accountability and transparency in regularly disclosing publicly our progress in implementing the Principles.  Annual disclosure in the Ageas's Annual Report in accordance with GRI - core  Thematic disclosures on e.g. TCFD, CO2, taxes, lobbying, memberships, UN GC principles  Responding to several ESG rating agancies, amongst others CDP https://www.ageas.com/investors/quarterly-results https://sustainability.ageas.com/reporting 319 Ageas Annual Report 2021 320 | 240 Amortised cost The amount at which a financial asset or liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation/accretion of any premium/discount, and minus any write- down for impairment. Asset backed security A bond or a note backed by debt instruments (not being mortgages) or accounts receivable. Associate A company on which Ageas has significant influence but which it does not control. Basis point (bp) One hundredth of a percentage point (0.01%). Cash flow hedge A hedge to mitigate exposure to fluctuations in the cash flow of a recognised asset or liability, or forecasted transaction, as a consequence of movements in variable rates or prices. Clean fair value The fair value excluding the unrealised portion of interest accruals. Clearing Administrative settlement of securities, futures and options transactions through a clearing organisation and the financial institutions associated with it (clearing members). Contract boundaries Under Solvency II, in principle all obligations relating to an insurance contract, including obligations relating to unilateral rights of the insurance undertaking to renew or extend the scope of the contract and obligations that relate to paid premium, belong to the boundary of the contract. The obligations that relate to insurance cover provided by the insurance undertaking after the future date where the insurance undertaking has a unilateral right (a) to terminate the contract, (b) to reject premiums payable under the contract or (c) to amend the premiums or the benefits payable under the contract in such a way that the premiums fully reflect the risks, do not belong to the boundary of the contract, unless the insurance undertaking can compel the policyholder to pay the premium for those obligations. Credit loss The difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expect to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. Credit spread The yield differential between government bonds and corporate bonds or credits. Custody An agreement, usually between an investor and a bank (or possibly an agent or a trust company), whereby the investor deposits for safekeeping securities, gold or other valuables with the bank, which in turn takes the valuables into safekeeping for a fee. Deferred acquisition cost The cost of acquiring new and renewed insurance business, principally commissions, underwriting, agency and policy issue expenses, all of which vary with and are primarily related to the production of new business. Derivative A financial instrument such as a swap, forward contract, futures contract or option (both written and purchased). This financial instrument has a value that changes in response to changes in various underlying variables. It requires little or no net initial investment, and is settled at a future date. Disability insurance Insurance against the financial consequences of long-term disability. Discounted cash flow method An approach to valuation, whereby projected future cash flows are discounted at an interest rate that reflects the time value of money and a risk premium that reflects the extra return investors demand for the risk that the cash flow might not materialise after all. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Glossary and Abbreviations 321 | 240 Discretionary participation feature A contractual right to receive, as a supplement to guaranteed benefits, additional benefits:  That are likely to be a significant proportion of the total contractual benefits;  Whose amount or timing is contractually at the discretion of the issuer and  That are contractually based on: (i) the performance of a specified pool of contracts or a specified type of contract; (ii) realised and/or unrealised investment returns on a specified pool of assets held by the issuer; or (iii) the profit or loss of the company, fund or other entity that issues the contract. Embedded derivative A derivative instrument that is embedded in another contract – the host contract. The host contract might be a debt or equity instrument, a lease, an insurance contract or a sale or purchase contract. Employee benefits All forms of considerations given by an entity in exchange for service rendered by employees, in addition to their pay or salary. Expected credit losses (ECL) The weighted average of credit losses with the respective risk of a default occurring as the weights. Fair value The amount for which an asset (liability) can be bought (incurred) or sold (settled), between knowledgeable, willing parties in an arm’s length transaction. Fair value hedge A hedge of an exposure to changes in the fair value of a recognised asset or liability (or a portion thereof) or a firm commitment. The exposure is attributable to a particular risk and will affect reported net income. Finance lease A lease that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred. Goodwill This represents the amount by which the fair value of the assets acquired, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the business, exceeds Ageas’s interest in the fair value of assets acquired and liabilities and contingent liabilities assumed. Gross written premiums Total premiums (whether or not earned) for insurance contracts written or accepted during a specific period, without deduction for premiums ceded. Hedge accounting Hedge accounting recognises the offsetting effects on profit or loss of changes in the fair values of the hedging instrument and the hedged item. IFRS International Financial Reporting Standards have been used as the accounting standards for all listed companies within the European Union since 1 January 2005 to ensure transparent and comparable accounting and disclosure. Impairment A decline in value whereby the carrying amount of the asset exceeds the recoverable amount. In such a case, the carrying amount will be reduced to its recoverable amount through the income statement. Insurance contract A contract under which one party (Ageas, its subsidiaries or associates) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder. Investment contract A life insurance policy contract that transfers financial risk without transferring significant insurance risk. Intangible asset An identifiable non-monetary asset, which is recognised at cost if and only if it will generate future economic benefits and if the cost of the asset can be measured reliably. Investment property Property held by Ageas to earn rental income or for capital appreciation. ISO Currency code list AUD Australia, Dollars CAD Canada, Dollars CHF Switzerland, Francs CNY China, Yuan Renminbi DKK Denmark, Kroner GBP Great Britain (United Kingdom), Pounds HKD Hong Kong, dollar HUF Hungary, Forint INR India, Rupee MAD Morocco, Dirham MYR Malaysia, Ringgits PHP Philippines Peso PLN Poland, Zloty RON Romania, Leu SEK Sweden, Kronor THB Thailand, Baht TRY Turkey, New Lira TWD Taiwan, New Dollars USD United States of America, Dollars ZAR South Africa, Rand Liquidity ratio A metric that allows assessing if the Ageas’s cash inflows ensure the liquidity position to operate efficiently, maintain the Ageas’s reputation in the market and allow to cover cash outflows in standard market conditions. Market capitalisation Value attributed to the company by the stock market. Market capitalisation corresponds to the number of shares outstanding multiplied by the share price at a given time. OTHER INFORMATION 320 Ageas Annual Report 2021 Glossary and Abbreviations 320 | 240 Amortised cost The amount at which a financial asset or liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation/accretion of any premium/discount, and minus any write- down for impairment. Asset backed security A bond or a note backed by debt instruments (not being mortgages) or accounts receivable. Associate A company on which Ageas has significant influence but which it does not control. Basis point (bp) One hundredth of a percentage point (0.01%). Cash flow hedge A hedge to mitigate exposure to fluctuations in the cash flow of a recognised asset or liability, or forecasted transaction, as a consequence of movements in variable rates or prices. Clean fair value The fair value excluding the unrealised portion of interest accruals. Clearing Administrative settlement of securities, futures and options transactions through a clearing organisation and the financial institutions associated with it (clearing members). Contract boundaries Under Solvency II, in principle all obligations relating to an insurance contract, including obligations relating to unilateral rights of the insurance undertaking to renew or extend the scope of the contract and obligations that relate to paid premium, belong to the boundary of the contract. The obligations that relate to insurance cover provided by the insurance undertaking after the future date where the insurance undertaking has a unilateral right (a) to terminate the contract, (b) to reject premiums payable under the contract or (c) to amend the premiums or the benefits payable under the contract in such a way that the premiums fully reflect the risks, do not belong to the boundary of the contract, unless the insurance undertaking can compel the policyholder to pay the premium for those obligations. Credit loss The difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expect to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. Credit spread The yield differential between government bonds and corporate bonds or credits. Custody An agreement, usually between an investor and a bank (or possibly an agent or a trust company), whereby the investor deposits for safekeeping securities, gold or other valuables with the bank, which in turn takes the valuables into safekeeping for a fee. Deferred acquisition cost The cost of acquiring new and renewed insurance business, principally commissions, underwriting, agency and policy issue expenses, all of which vary with and are primarily related to the production of new business. Derivative A financial instrument such as a swap, forward contract, futures contract or option (both written and purchased). This financial instrument has a value that changes in response to changes in various underlying variables. It requires little or no net initial investment, and is settled at a future date. Disability insurance Insurance against the financial consequences of long-term disability. Discounted cash flow method An approach to valuation, whereby projected future cash flows are discounted at an interest rate that reflects the time value of money and a risk premium that reflects the extra return investors demand for the risk that the cash flow might not materialise after all. Dit vlak moet blijven staan, is noodzakelijk voor de opmaak in Indesign (om afstand tot de tekst te kunnen maken). Glossary and Abbreviations 321 | 240 Discretionary participation feature A contractual right to receive, as a supplement to guaranteed benefits, additional benefits:  That are likely to be a significant proportion of the total contractual benefits;  Whose amount or timing is contractually at the discretion of the issuer and  That are contractually based on: (i) the performance of a specified pool of contracts or a specified type of contract; (ii) realised and/or unrealised investment returns on a specified pool of assets held by the issuer; or (iii) the profit or loss of the company, fund or other entity that issues the contract. Embedded derivative A derivative instrument that is embedded in another contract – the host contract. The host contract might be a debt or equity instrument, a lease, an insurance contract or a sale or purchase contract. Employee benefits All forms of considerations given by an entity in exchange for service rendered by employees, in addition to their pay or salary. Expected credit losses (ECL) The weighted average of credit losses with the respective risk of a default occurring as the weights. Fair value The amount for which an asset (liability) can be bought (incurred) or sold (settled), between knowledgeable, willing parties in an arm’s length transaction. Fair value hedge A hedge of an exposure to changes in the fair value of a recognised asset or liability (or a portion thereof) or a firm commitment. The exposure is attributable to a particular risk and will affect reported net income. Finance lease A lease that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred. Goodwill This represents the amount by which the fair value of the assets acquired, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the business, exceeds Ageas’s interest in the fair value of assets acquired and liabilities and contingent liabilities assumed. Gross written premiums Total premiums (whether or not earned) for insurance contracts written or accepted during a specific period, without deduction for premiums ceded. Hedge accounting Hedge accounting recognises the offsetting effects on profit or loss of changes in the fair values of the hedging instrument and the hedged item. IFRS International Financial Reporting Standards have been used as the accounting standards for all listed companies within the European Union since 1 January 2005 to ensure transparent and comparable accounting and disclosure. Impairment A decline in value whereby the carrying amount of the asset exceeds the recoverable amount. In such a case, the carrying amount will be reduced to its recoverable amount through the income statement. Insurance contract A contract under which one party (Ageas, its subsidiaries or associates) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder. Investment contract A life insurance policy contract that transfers financial risk without transferring significant insurance risk. Intangible asset An identifiable non-monetary asset, which is recognised at cost if and only if it will generate future economic benefits and if the cost of the asset can be measured reliably. Investment property Property held by Ageas to earn rental income or for capital appreciation. ISO Currency code list AUD Australia, Dollars CAD Canada, Dollars CHF Switzerland, Francs CNY China, Yuan Renminbi DKK Denmark, Kroner GBP Great Britain (United Kingdom), Pounds HKD Hong Kong, dollar HUF Hungary, Forint INR India, Rupee MAD Morocco, Dirham MYR Malaysia, Ringgits PHP Philippines Peso PLN Poland, Zloty RON Romania, Leu SEK Sweden, Kronor THB Thailand, Baht TRY Turkey, New Lira TWD Taiwan, New Dollars USD United States of America, Dollars ZAR South Africa, Rand Liquidity ratio A metric that allows assessing if the Ageas’s cash inflows ensure the liquidity position to operate efficiently, maintain the Ageas’s reputation in the market and allow to cover cash outflows in standard market conditions. Market capitalisation Value attributed to the company by the stock market. Market capitalisation corresponds to the number of shares outstanding multiplied by the share price at a given time. 321 Ageas Annual Report 2021 322 | 240 NCI Non-controlling interest. Net investment hedge A hedge used to reduce the financial risks of a reporting entity’s share of the net assets of a foreign entity by entering into transactions that give an offsetting risk profile. Notional amount Amount of currency units, number of shares, a number of units of weight or volume or other units specified in a derivative contract. Operating lease A contract that allows the use of an asset in return for periodic payments, but does not convey rights similar to legal ownership of the asset and where the financial risks related to the asset are borne by the lessor. Operating margin Operating income divided by net premium. Operating income is the profit or loss stemming from all operations, including underwriting and investments. Option A privilege sold by one party to another that offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security at an agreed price during a certain period of time or on a specific date. Private equity Equity securities of companies that are not listed on a public exchange. Investors wishing to sell their stake in a private company have to find a buyer themselves owing to the lack of a marketplace. Provision Provisions are liabilities involving uncertainties in the amount or timing of payments. Provisions are recognised if there is a present obligation to transfer economic benefits, such as cash flows, as a result of past events and a reliable estimate can be made at the date of the statement of financial position. Reverse repurchase agreement The purchase of securities with an agreement to resell them at a higher price at a specific future date. Shadow accounting According to IFRS 4 an insurer is permitted, but not required, to change its accounting policies so that a recognised but unrealised gain or loss on an asset affects the measurement of the insurance liabilities. The related deferred adjustment to the insurance liability (or deferred acquisition costs or intangible assets) is recognised in equity only if the unrealised gains or losses are recognised directly in equity. Securities lending transaction A loan of a security from one counterparty to another who must eventually return the same security as repayment. The loan is often collateralised. Securities lending allows an entity in possession of a particular security to earn enhanced returns. SPPI (Solely Payments of Principal and Interest) A financial asset meets the SPPI test if the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Stress liquidity ratio A set of metrics that allows assessing if the Ageas’s cash inflows ensure sufficiently the liquidity position to operate efficiently, maintain the Ageas’s reputation in the market and avoid losses from obligations in its liabilities under stressed liquidity conditions. Structured credit instruments Securities created by repackaging cash flows from financial contracts and encompassing asset-backed securities (ABS), mortgage-backed securities (MBS) and collateralised debt obligations (CDO). Subordinated bond (loan) A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Subsidiary Any company, of which Ageas, either directly or indirectly, has the power to govern the financial and operating policies so as to obtain the benefits from its activities (‘control’). Trade date The date when Ageas becomes a party to the contractual provisions of a financial asset. Value of business acquired (VOBA) The present value of future profits from acquired insurance contracts. VOBA is recognised as an intangible asset and amortised over the period in which the premiums or gross profits of the policies are recognised. VaR Abbreviation of value at risk. A technique that uses the statistical analysis of historical market trends and volatilities to estimate the likelihood that a given portfolio’s losses will exceed a certain amount. 323 | 240 Abbreviations AFS Available-for-sale ALM Asset and liability management CASHES Convertible and subordinated hybrid equity-linked securities CDS Credit default swap CEU Continental Europe CGU Cash generating unit DPF Discretionary participation features ECL Expected credit losses EPS Earnings per share Euribor Euro interbank offered rate EV Embedded value FRESH Floating rate equity linked subordinated hybrid bond GDPR General Data Protection Regulation HTM Held-to-maturity HFT Held for trading IBNR Incurred but not reported IFRIC International Financial Reporting Interpretations Committee IFRS International Financial Reporting Standards LAT Liability Adequacy Test MCS Mandatory convertible securities OTC Over the counter SPPI Solely Payments of Principal and Interest SPV Special purpose vehicle UK United Kingdom OTHER INFORMATION 322 Ageas Annual Report 2021 322 | 240 NCI Non-controlling interest. Net investment hedge A hedge used to reduce the financial risks of a reporting entity’s share of the net assets of a foreign entity by entering into transactions that give an offsetting risk profile. Notional amount Amount of currency units, number of shares, a number of units of weight or volume or other units specified in a derivative contract. Operating lease A contract that allows the use of an asset in return for periodic payments, but does not convey rights similar to legal ownership of the asset and where the financial risks related to the asset are borne by the lessor. Operating margin Operating income divided by net premium. Operating income is the profit or loss stemming from all operations, including underwriting and investments. Option A privilege sold by one party to another that offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security at an agreed price during a certain period of time or on a specific date. Private equity Equity securities of companies that are not listed on a public exchange. Investors wishing to sell their stake in a private company have to find a buyer themselves owing to the lack of a marketplace. Provision Provisions are liabilities involving uncertainties in the amount or timing of payments. Provisions are recognised if there is a present obligation to transfer economic benefits, such as cash flows, as a result of past events and a reliable estimate can be made at the date of the statement of financial position. Reverse repurchase agreement The purchase of securities with an agreement to resell them at a higher price at a specific future date. Shadow accounting According to IFRS 4 an insurer is permitted, but not required, to change its accounting policies so that a recognised but unrealised gain or loss on an asset affects the measurement of the insurance liabilities. The related deferred adjustment to the insurance liability (or deferred acquisition costs or intangible assets) is recognised in equity only if the unrealised gains or losses are recognised directly in equity. Securities lending transaction A loan of a security from one counterparty to another who must eventually return the same security as repayment. The loan is often collateralised. Securities lending allows an entity in possession of a particular security to earn enhanced returns. SPPI (Solely Payments of Principal and Interest) A financial asset meets the SPPI test if the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Stress liquidity ratio A set of metrics that allows assessing if the Ageas’s cash inflows ensure sufficiently the liquidity position to operate efficiently, maintain the Ageas’s reputation in the market and avoid losses from obligations in its liabilities under stressed liquidity conditions. Structured credit instruments Securities created by repackaging cash flows from financial contracts and encompassing asset-backed securities (ABS), mortgage-backed securities (MBS) and collateralised debt obligations (CDO). Subordinated bond (loan) A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Subsidiary Any company, of which Ageas, either directly or indirectly, has the power to govern the financial and operating policies so as to obtain the benefits from its activities (‘control’). Trade date The date when Ageas becomes a party to the contractual provisions of a financial asset. Value of business acquired (VOBA) The present value of future profits from acquired insurance contracts. VOBA is recognised as an intangible asset and amortised over the period in which the premiums or gross profits of the policies are recognised. VaR Abbreviation of value at risk. A technique that uses the statistical analysis of historical market trends and volatilities to estimate the likelihood that a given portfolio’s losses will exceed a certain amount. 323 | 240 Abbreviations AFS Available-for-sale ALM Asset and liability management CASHES Convertible and subordinated hybrid equity-linked securities CDS Credit default swap CEU Continental Europe CGU Cash generating unit DPF Discretionary participation features ECL Expected credit losses EPS Earnings per share Euribor Euro interbank offered rate EV Embedded value FRESH Floating rate equity linked subordinated hybrid bond GDPR General Data Protection Regulation HTM Held-to-maturity HFT Held for trading IBNR Incurred but not reported IFRIC International Financial Reporting Interpretations Committee IFRS International Financial Reporting Standards LAT Liability Adequacy Test MCS Mandatory convertible securities OTC Over the counter SPPI Solely Payments of Principal and Interest SPV Special purpose vehicle UK United Kingdom 323 Ageas Annual Report 2021 AgeasandageasSA/NV RueduMarquis1 1000Brussels,Belgium www.ageas.com

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