Unipol — Interim / Quarterly Report 2017

Aug 4, 2017

1H17 CONSOLIDATED RESULTS UNIPOL AND UNIPOLSAI

Bologna, 4 August 2017

•

•

The figures outlined in this document:

• include the effects of the restructuring of the banking business, approved by the Board of Directors of Unipol and UnipolSai on the 28 July 2017;
• do not include the effects of the streamlining of the Group insurance business as approved by the Boards of Unipol and UnipolSai the 29 June 2017, which is expected to be completed by the end of the current financial year, subject to IVASS authorizations.

PART1 CONSOLIDATED RESULTS

	1H16	1H17	1H17 a normalized
Consolidated pre-tax result	394	-516	509
Non-Life	268	368	368
Life	193	212	212
Banking	2	-940	5
Holding and other	-68	-156	-76
Consolidated net result	276	-390	390
Group net result	160	-489	263

	1H16	1H17	1H17 a normalized
Consolidated pre-tax result	383	394	498
Non-Life	225	235	320
Life	176	181	200
Other	-18	-22	-22
Consolidated net result	280	282	387
Group net result	269	265	369

PART 2 NON-LIFE INSURANCE BUSINESS

Charles Comments

Premiums by company	1H16	1H17
UnipolSai (group)	3,685	3,673
Linear	74	87
UniSalute	197	210
Arca	54	56
Unipol	4,011	4,026

Premiums by company	1H16	1H17
UnipolSai S.p.A.	3,556	3,506
Other companies	129	167
UnipolSai	3,685	3,673

Combined ratio net of reinsurance: operating expenses/earned premiums after reinsurance+claims charges/earned premiums after reinsurance

MV TPL Combined Ratio	1H16	1H17
Direct Business	99.9%	101.7%
ratio a Expense	21.8%	22.5%
commissions/premiums	13.7%	13.9%
other operating expenses/premiums	8.1%	8.6%
ratio b (incl. OTI) Loss	78.1%	79.2%

Other MV TPL indicators	Var. vs FY16
Total portfolio	-0.1%
retail	-0.1%
fleets	+0.7%
Portfolio average premium	-2.1%
	Var. vs 1H16
No. of claims reported (followed-up passive claims)	-1.1%
Frequency	-0.01 p.p.

No. of black boxes 3.3 million (35% of the portfolio)

^a Operating expenses / written premiums from direct business (before reinsurance) ^b Claims charges / earned premiums from direct business (before reinsurance) Operating figures

	1H16	1H17
Premium income	326	353
MV	85	95
Accident & Health	218	232
Other	22	25
CoR direct business	87.8%	87.2%
Expense ratio	16.4%	16.5%
Loss ratio (incl. OTI)	71.4%	70.8%
IAS net result	29	33

PART₂ LIFE. INSURANCE BUSINESS

Contraction Contraction

On the 29 June 2017, the BoD of UnipolSai approved the termination of the agreement with Banco BPM and the exercising of the put option on its stake in Popolare Vita

PART 3 BANKING BUSINESS

The restructuring of Unipol Group's banking business was approved by the Boards of Unipol and UnipolSai, on 27 July 2017; the guidelines and strategic motivations were communicated to the market on 30 June 2017

STRATEGIC RATIONALE

• to refocus Unipol Banca on its core business with the aim to increase its potential profitability
• to progress Unipol Banca's risk indicators to excellent levels
• to render more efficient the management of the NPEs transferred to the NewCo, maximizing the returns
• to pursue with greater ease every possible strategic option for Unipol Banca

IN PRACTICE

• Increase of the average coverage ratios to:
• 80% Bad loans, 40% Unlikely to Pay, 15% Past Due
• Write-downs:
• gross write-downs made by Unipol Banca for € 1.6 bn (€ 0.9 bn net of income deriving from the termination of the indemnity agreement the value of which is € 0.7 bn)
• gross write-downsfor € 0.1 bn made by Unipol S.p.A. due to the termination of the indemnity agreement
• Capital contributions in favour of Unipol Banca for € 0.9 bn (57.75% Unipol and 42.25% UnipolSai) after the write-downs and in light of the capital destined for the NewCo
• Proportional partial demerger of certain assets and liabilities including a portfolio of around € 3 bn gross bad loans (around € 0.6 bn net), from Unipol Banca to the NewCo
• Debt financing of the NewCo will come to € 0.3 bn (57.75% Unipol and 42.25% UnipolSai)

ECONOMIC IMPACT

Negative impact of € 0.8 bn on Unipol consolidated net result at 30 June 2017, expected to be confirmed at year end 2017

	Gross operating income	Net result		Loan Loss Provisions (LLPs)	FY16	1H17
174	174			LLPs Unipol Banca	44	920
110	110			LLPs Unipol	30	105
64	64			LLPs Finitalia	6	4
1H16	1H17	1	-712	Total LLPs	80	1,029
	normalized	1H16	1H17	Total NPEs coverage ratio	45.7%	70.4%
interest income	non-interest income
		Unipol CET1 ratio b
		Unipol Banca CET1 ratio post capital contributions	of 900m

* The banking business is comprised of Unipol Banca, its subsidiaries and UnipolSai Investimenti SGR – Operating figures

^a 1H17 net of loans to the parent company

^bCET 1 ratio at Unipol level. CET 1 ratio at Finsoe level is equal to 12.6%

		FY16			1H17
	net loans	gross loans	coverage ratio	net loans	gross loans	coverage ratio
Bad loans (Sofferenze)	1,127	2,651	57.5%	598	2,985	80.0%
Unlikely to pay	767	958	19.9%	445	740	40.0%
Past due	145	151	3.5%	91	107	15.0%
Total NPEs	2,040	3,760	45.7%	1,134	3,832	70.4%

* The banking business is comprised of Unipol Banca, its subsidiaries and UnipolSai Investimenti SGR – Operating figures Including provisions made by Unipol S.p.A.

SOFP ASSETS SOFP LIABILITIES Net loans 8.0 Total Equity ^a 0.6 o/w Net NPEs 0.5 Other 3.6 Debts ^a 11.0 Total 11.6 Total 11.6 €bn Net NPEs / Net loans ~7% Gross NPEs / Gross loans ~10% Texas ratio ~90% net loans gross loans coverage ratio 7 34 80.0% 442 737 40.0% 88 103 15.0% 537 875 38.6% NPEs Bad loas (Sofferenze) Unlikely to pay Past due Total NPEs €m

SOFP ASSETS NPEs	0.6	SOFP LIABILITIES Total Equity a	0.3
Other	0.0	a Debts	0.3
Total	0.6	Total	0.6

Total NPEs	587	2,936	80.0%
Bad loas (Sofferenze)	587	2,936	80.0%
NPEs	net loans	gross loans	coverage ratio

^a 57.75% pertaining to Unipol and 42.25% pertaining to UnipolSai Statement of Financial Position (SOFP)

PART₄ INVESTMENTS

Contraction Contraction

INVESTMENTS 20

FINANCIAL INVESTMENT YIELDS

UNIPOL

UNIPOLSAI

				1H17							1H17
		Non-Life		Life		Total			Non-Life		Life		Total
	€m	Yield%	€m	Yield%	€m	Yield%		€m	Yield%	€m	Yield%	€m	Yield%
Coupons and dividends	238	3.6%	679	3.5%	919	3.5%	Coupons and dividends	225	3.7%	576	3.6%	801	3.6%
Realized and unrealized gains/losses	86	1.3%	38	0.2%	125	0.5%	Realized and unrealized gains/losses	83	1.4%	45	0.3%	128	0.6%
Total	324	4.8%	717	3.7%	1,044	3.9%	Total	309	5.0%	620	3.8%	929	4.2%

Figures net of the Atlante Fund write-down amounting to $\epsilon$ 62 m

^a No. 61 deeds as at 30 June 2017. b Including exchange variation and operations on RE funds and associated SPV Operating figures

PART 5 SOLVENCY

€bn

€bn

PART 6 APPENDIX

France of Britain

RANT

	1H16	1H17	1H17 a normalized
Consolidated net result	276	-390	390
Group net result	160	-489	263
Premium income direct business	8,408	6,327
o/w Non-Life	4,011	4,026
o/w Life	4,396	2,300
Combined Ratio	96.3%	97.1%
	FY16	1H17	1H17 normalized
Total equity	8,134	7,182	7,962
Shareholder's equity	5,649	5,052	5,803

	1H16	1H17	1H17 a normalized
Consolidated net result	280	282	387
Group net result	269	265	369
Premium income direct business	6,722	5,604
o/w Non-Life	3,685	3,673
o/w Life	3,036	1,931
Combined Ratio	96.9%	97.9%
	FY16	1H17	1H17 normalized
Total equity	6,535	6,381	6,486
Shareholder's equity	6,156	6,072	6,177

^a Figures restated excluding the impacts of the restructuring of the Group banking sector, as illustrated on p. 14

The Boards of Unipol and UnipolSai on 29 June 2017 approved the streamlining of the insurance business of the Unipol Group

STRATEGIC RATIONALE

• to concentrate all of the insurance businesses under the control of UnipolSai
• to develop an integrated multi-channel product model
• to simplify the operating governance framework
• to transform Unipol into solely a holding company, tasked with coordinating and controlling the banking and insurance business

IN PRACTICE

• Transferral to UnipolSai of Unipol's former stakes in
• UniSalute (98.53%) at a price of € 715 m
• Linear (100%) at a price of € 160 m

The restructuring is expected to be completed over the course of 2017, provided that the necessary authorizations are obtained

• Should the necessary conditions apply, possible transfer to UnipolSai of the stake currently held by Unipol in
• Arca Vita (63.39%)

Restructuring of the banking business

Streamlining of the insurance business

^aIncluding the shares held by Unipol Finance and Unipol Investment

.

^b O/w 27.49% is the subject of a put option granted by Unipol to UnipolSai and of a call option granted by UnipolSai to Unipol

DISCLAIMER

29

Maurizio Castellina, Senior Executive responsible for drawing up the corporate accounts of Unipol S.p.A. and Unipol Sai Assicurazioni S.p.A., declares, in accordance with Article 154-bis, para 2, of the 'Consolidated Finance Act', that the accounting information reported in this document corresponds to the document contents, books and accounting records.

This document has been prepared by Unipol S.p.A. and by UnipolSai Assicurazioni S.p.A. solely for information purposes in the context of the presentation of their 1H17 results. The content of this document does not constitute a recommendation in relation to any financial instruments issued by the companies of the Unipol Group, nor it constitutes or forms part of any offer or invitation to sell, or any solicitation to purchase any financial instruments issued by the companies of the Unipol Group, nor it may be relied upon for any investment decision by its addressees. Unless otherwise specified all the figures reported in this presentation are on a consolidated basis.

30

INVESTOR RELATIONS CONTACTS

Adriano Donati Head of Investor Relations Tel +39 051 507 7063

investor.relations@unipol.it investor.relations@unipolsai.it

Giancarlo Lana	Tel +39 011 66 57 088
Fleonora Roncuzzi	Tel +39 051 507 7063
Carlo Latini	Tel +39 051 507 6333
Giuseppe Giuliani	Tel +39 051 507 7218
Silvia Tonioli	Tel +39 051 507 2371