UnipolSai Assicurazioni : Press Release - Unipol Group: results for the first half of 2015 approved

Nas ac

Bologna, 7 August 2015

UNIPOL GROUP: RESULTS FOR THE FIRST HALF OF 2015 APPROVED

 Consolidated net profit of €446m (+86% compared to the first half of

2014)

 Direct insurance income of €8,701m (-9.9% net of the sale of the business unit to Allianz)

 Combined ratio at 95.3%1

 Solvency margin equal to 169%2

The Board of Directors of Unipol Gruppo Finanziario S.p.A., which met yesterday under the chairmanship of Pierluigi Stefanini, approved the consolidated accounts of the Group as at 30 June
2015.
The Unipol Group closed the first half of 2015 with a consolidated net profit of €446m, a significant increase (+86.1%) compared to €240m in the same period of 2014, thanks to the positive results of financial management.
During the first half of the year, direct insurance income gross of outwards reinsurance stood at
€8,701m (-13.6% compared to €10,070m as at 30 June 2014) and was impacted by the effects of the sale of the business unit to Allianz: net of the effects of such transaction, the decrease in income would have been equal to -9.9%3.
The pre-tax result of insurance business amounted to €784m (€589m in the first half of 2014). Non- Life business contributed to this result with €534m (€461m in the first six months of 2014) and Life business with €250m (€128m in the first half of 2014).

Non-Life Business

In the first six months of 2015 premium income was impacted by the effects of the sale of the business unit comprising the former Milano Assicurazioni agencies to Allianz, which resulted in the transfer of the relative portfolio. This effect will be prolonged throughout 2015. Moreover, income continued to be affected by strong competition, particularly in vehicle liability insurance.
In this context, Non-Life direct premium income of the Group amounted to €4,082m (-14.1% compared to €4,753m in the first half of 2014, or -5.9% on a comparable basis net of the sale of the business unit to Allianz3). The UnipolSai Group contributed to this total with €3,772m (-15% compared

1 Combined ratio of direct business

2 Figure inclusive of the convertible bond loan issued in April 2014

3 Estimated management figure

1

to 2014, -6.2% on a comparable basis3) while the other direct subsidiary companies of Unipol Gruppo
Finanziario (UniSalute, Linear and Arca Assicurazioni) contributed with €309m.
In particular, UniSalute recorded direct premium income of €177m, with an increase of 8.4%
compared to the first half of 2014.
MV premium income amounted to €2,331m (-19.2% compared to €2,884m as at 30 June 2014, -8.8% on a comparable basis3). Non-MV business held its own with premium income amounting to €1,751m, a decrease of 6.3% (-1.8% on a comparable basis3) compared to €1,869m in the first half of 2014.
With regard to the trend in claims, technical indicators remained positive in vehicle liability insurance thanks to the constant monitoring of average costs and stability in the frequency of claims. In Non-MV business the claims trend was impacted by substantial damage caused by an extraordinary climatic event that affected Tuscany in March.
In this context, as at 30 June 2015, the Unipol Group recorded a combined ratio of 95.3%1(97.2% net of reinsurance4) compared to 93.4% in the same period of 2014, confirming a prudential approach with regard to current provisions and the management of prior years' reserves. The loss ratio (direct business) stood at 68.7% (67.7% as at 30 June 2014) with a decline linked primarily to the aforementioned climatic event, which increased the loss ratio by 1.1%. The expense ratio (direct business) was equal to 26.6% (25.7% in the same period of 2014) and, despite a 7% decrease in management costs, was impacted by the drop in premiums and change in the production mix.
The pre-tax result of the business was a profit of €534m (€461m in the first half of 2014), also due to the particularly positive effects of financial management.

Life Business

In Life business, a market environment characterised by low interest rates continued to favour the offer of traditional insurance products with returns on segregated assets. Direct income amounted to
€4,619m, a decrease of 13.1% compared to €5,318m in the first half of 2014, due to comparison with a very strong performance recorded in the first half of 2014 compared to the same period of 2013 (+33%).
In particular, with regard to the main companies of the Group operating in Life business, there was a decline in Popolare Vita Group production due to the different scheduling of sales campaigns, which with €1,597m saw a decrease of 35.4% compared, however, to a growth of 55% recorded in the first half of 2014. On the other hand, the Arca Vita Group recorded a strong growth in income with a total of
€1,107m (+30.7% compared to the first half of 2014). UnipolSai recorded an income of €1,799m (-
5.6% compared to the first half of 2014).
The pre-tax result of the business, which benefitted from particularly high financial profitability, was a
profit of €250m (€128m in the first half of 2014).

4 This indicator differs from that referring to direct business also due to the denominator of the expense ratio (attributable premiums instead of written premiums).

2

Banking Business

The business recorded a net profit of €4m as at 30 June 2015 (€6m in the same period of 2014).
Direct income of Unipol Banca5amounted to €9,783m, a decrease of 2.5% compared to 31 December
2014. A prudent lending policy was confirmed, also shown by a drop compared to the year-end figure of 2014 (-3.0%) in loans to customers, which amounted to €9,129m6. There was no increase in impaired loans, which remained broadly in line with those as at the end of 2014. The CET1 of the Unipol Banking Group as at 30 June 2015 was equal to 17.2%.

Real Estate Business

With regard to real estate business, which remains impacted by difficult market conditions, operations were focused on the restoration and development of properties in portfolio.
The pre-tax result of the business as at 30 June 2015 was a loss of €81m (-30m as at 30 June 2014), particularly influenced by gross write-downs on certain properties amounting to €69m preliminary to updated estimated realisable values on a medium-term basis.

Financial Management

During the period under review, the profitability of the Group securities portfolio, despite aiming to preserve the risk/return profile of the assets and consistency between the assets and liabilities underwritten with policyholders, achieved a significant yield, equal to approximately 5.9% of invested assets. The disposal policy aimed at increasing the diversification profile of the financial assets portfolio held by the Group Companies contributed to this result.

Balance Sheet

Consolidated shareholders' equity as at 30 June 2015 amounted to €8,106m (€8,440m as at 31
December 2014, including €350m in dividends distributed during the first half of the year) of which
€5,368m attributable to the Group. The AFS reserve as at 30 June 2015 was equal to €827m (€1,234m as at 31 December 2014), reduced primarily due to the rise in market yields occurring in June. The AFS reserve stood at approximately €1,110m as at the end of July.
The consolidated solvency margin for the first half of 2015 was equal to 169%2of the minimum required, in line with the value at the end of 2014.

Business Outlook

The Group has continued the integration of business management IT systems and other already identified corporate restructuring activities, as envisaged in the strategic guidelines defined in the Business Plan.

5 Including its subsidiaries and excluding collateralised income with CC&G

6 Net of provisions by U.G.F. SpA

3

Corporate Governance

The Board of Directors, following approval by the Committee for Transactions with Related Parties, also decided to change the procedure for carrying out transactions with related parties, in order to (i) extend, on a voluntary basis, its application to the listed company IGD SIIQ S.p.A. pursuant to the framework agreement in place between UGF, UnipolSai Assicurazioni and IGD itself, which was announced to the market on 8 August 2014 and (ii) make a correction aimed at simplifying the procedure for transactions with related parties entered into by subsidiaries.
Such procedure, as amended above, is available on the Company's website www.unipol.itunder the section Corporate Governance/Transactions with related parties.

Presentation of the Results to the Financial Community

A conference call will be held at 12:00 pm today during which financial analysts and institutional investors may address questions to the Chief Executive Officer and top management concerning the results for the first half of the year. The phone numbers to dial to attend the event are:
+39/02/8020911 (from Italy and all other countries), +1/718/7058796 (from the US), +44/121/2818004 (from the UK).

***

The consolidated interim financial report as at 30 June 2015 will be made available, in accordance with law, at the registered office, on the Company's website www.unipol.itand on the website of Borsa Italianawww.borsaitaliana.it

***

Please find attached hereto the Consolidated Balance Sheet, Consolidated Income Statement and the

Condensed Consolidated Income Statement Broken Down by Business Segment.

***

Maurizio Castellina, Manager in charge of financial reporting of Unipol Gruppo Finanziario S.p.A., declares, pursuant to Article 154-bis, paragraph 2, of the 'Consolidated Law on Financial Intermediation', that the accounting information contained in this document corresponds to the figures in corporate accounting records, ledgers and documents.

4

Glossary

CET1: Common Equity Tier 1, core measure of banking financial strength Basel III COMBINED RATIO: sum of loss ratio and expense ratio

EXPENSE RATIO: ratio of Non-Life operating expenses and attributable premiums

LOSS RATIO: ratio of Non-Life claims and premiums

AFS RESERVE: reserve on assets classified as 'Available-For-Sale'

Contacts

Unipol Group Press Office

Fernando Vacarini

Tel. [phone] [e-mail]

Barabino & Partners Massimiliano Parboni [e-mail] Tel. [phone]

Giovanni Vantaggi [e-mail] Tel. [phone]

Unipol Group Investor

Relations

Adriano Donati

Tel. [phone] [e-mail]

Unipol Gruppo Finanziario S.p.A.

Unipol is one of the leading insurance groups in Europe with a total income amounting to approximately €17.8bn, of which €8.9bn in Non-Life Business and €8.9bn in Life Business (2014 figures). Unipol adopts an integrated offer strategy and covers a complete range of insurance and financial products, operating primarily through its subsidiary UnipolSai Assicurazioni S.p.A., founded at the beginning of 2014, Italian leader in Non-Life Business, in particular in vehicle liability insurance.

The Group is also active in direct vehicle insurance (Linear Assicurazioni), health protection (UniSalute), supplementary pensions and has a strong presence in the bancassurance channel (Arca Vita Group and Popolare Vita Group).

Finally, Unipol operates in the banking business through the network of Unipol Banca branches and manages significant diversified businesses in the real estate, hotel (Atahotels) and agricultural (Tenute del Cerro) sectors.

Unipol Gruppo Finanziario S.p.A. is listed on the Italian Stock Exchange.

5

Consolidated Balance Sheet - Assets

Amounts in €m

30/6/2015	31/12/2014
1	INTANGIBLE ASSETS	2,093.3	2,133.2
1.1	Goodwill	1,581.9	1,581.9
1.2	Other intangible assets	511.4	551.2
2	PROPERTY, PLANT AND EQUIPMENT	1,495.9	1,521.6
2.1	Property	1,361.1	1,364.2
2.2	Other items of property, plant and equipment	134.8	157.4
3	TECHNICAL PROVISIONS - REINSURERS' SHARE	995.5	988.4
4	INVESTMENTS	78,507.0	77,946.0
4.1	Investment property	2,542.2	2,645.6
4.2	Investments in subsidiaries and associates and interests in joint ventures	95.4	177.8
4.3	Held-to-maturity investments	1,894.9	2,238.0
4.4	Loans and receivables	14,700.6	14,657.7
4.5	Available-for-sale financial assets	48,754.6	48,378.1
4.6	Financial assets at fair value through profit or loss	10,519.3	9,848.8
5	SUNDRY RECEIVABLES	2,961.5	3,594.0
5.1	Receivables relating to direct insurance business	1,265.6	1,691.9
5.2	Receivables relating to reinsurance business	61.8	95.0
5.3	Other receivables	1,634.1	1,807.1
6	OTHER ASSETS	2,063.6	1,769.8
6.1	Non-current assets held for sale or disposal groups	22.8	9.4
6.2	Deferred acquisition costs	81.7	75.6
6.3	Deferred tax assets	1,089.3	1,043.5
6.4	Current tax assets	92.0	119.9
6.5	Other assets	777.8	521.4
7	CASH AND CASH EQUIVALENTS	1,021.2	674.4
TOTAL ASSETS	89,138.0	88,627.3

Consolidated Balance Sheet - Equity and Liabilities

Amounts in €m

Consolidated Income Statement

Amounts in €m

30/6/2015	30/6/2014
1.1	Net premiums	8,089.6	9,851.3
1.1.1	Gross premiums	8,304.1	10,080.2
1.1.2	Ceded premiums	-214.5	-228.9
1.2	Fee and commission income	79.9	62.3
1.3	Gains and losses on financial instruments at fair value through profit or loss	371.9	169.6
1.4	Gains on investments in subsidiaries and associates and interests in joint ventures	3.7	2.9
1.5	Gains on other financial instruments and investment property	1,659.4	1,765.2
1.5.1	Interest income	1,002.7	1,065.2
1.5.2	Other gains	89.9	110.5
1.5.3	Realised gains	487.1	521.0
1.5.4	Unrealised gains	79.8	68.5
1.6	Other revenue	242.8	216.2
1	TOTAL REVENUE AND INCOME	10,447.3	12,067.5
2.1	Net charges relating to claims	-7,469.4	-8,982.3
2.1.1	Amounts paid and changes in technical provisions	-7,568.7	-9,075.4
2.1.2	Reinsurers' share	99.3	93.1
2.2	Fee and commission expense	-18.5	-17.8
2.3	Losses on investments in subsidiaries and associates and interests in joint ventures	-7.8	-9.4
2.4	Losses on other financial instruments and investment property	-477.5	-619.5
2.4.1	Interest expense	-136.7	-134.5
2.4.2	Other charges	-23.2	-63.9
2.4.3	Realised losses	-90.2	-177.8
2.4.4	Unrealised losses	-227.4	-243.3
2.5	Operating expenses	-1,399.5	-1,592.7
2.5.1	Commissions and other acquisition costs	-924.6	-1,077.1
2.5.2	Investment management expenses	-38.8	-37.3
2.5.3	Other administrative expenses	-436.2	-478.2
2.6	Other costs	-427.2	-429.3
2	TOTAL COSTS AND EXPENSES	-9,799.9	-11,650.9
PRE-TAX PROFIT (LOSS) FOR THE YEAR	647.4	416.5
3	Income tax	-201.5	-175.8
POST-TAX PROFIT (LOSS) FOR THE YEAR	445.9	240.7
4	PROFIT (LOSS) FROM DISCONTINUED OPERATIONS	0.0	-1.1
CONSOLIDATED PROFIT (LOSS) FOR THE YEAR	445.9	239.6
attributable to the ow ners of the Parent	254.9	103.2
attributable to non-controlling interests	191.0	136.4

Statement of Comprehensive Income

Amounts in €m

30/6/2015 30/6/2014 CONSOLIDATED PROFIT (LOSS) 445.9 239.6 Other income net of taxes not reclassified in the income statement 10.4 0.0

Variation in equity of investees 7.1 4.5

Variation in the revaluation reserve for intangible assets 0.0 0.0

Variation in the revaluation reserve for property, plant and equipment 0.0 0.0

Gains or losses on non-current assets held for sale and disposal

groups

Actuarial gains and losses and adjustments relating to defined benefit plans

0.0 0.0

3.3 -3.2

Other items 0.0 -1.2

Other income net of taxes reclassified in the income statement -444.7 657.4

Variation in net translation reserves 0.0 -4.0

Gains or losses on available-for-sale financial assets -407.9 635.8

Gains or losses on cash flow hedges -36.7 25.6

Gains or losses on hedges of a net investment in foreign operations 0.0 0.0

Variation in equity of investees 0.0 0.0

Gains or losses on non-current assets held for sale and disposal

groups

0.0 0.0

Other items 0.0 0.0

TOTAL OTHER COMPREHENSIVE INCOME -434.2 657.4

TOTAL CONSOLIDATED COMPREHENSIVE INCOME 11.6 897.0attributable to the owners of the Parent -57.0 743.1attributable to non-controlling interests 68.7 154.0

Condensed Consolidated Income Statement by Business Segment

Amounts in €m

NON-LIFE BUSINESS	LIFE BUSINESS	INSURANCE BUSINESS	BANKING BUSINESS	HOLDINGS/SERVICES/ OTHER BUSINESSES	REAL ESTATE BUSINESS (*)	Intersegment Elimination	CONSOLIDATED TOTAL
Jun-15 Jun-14 var.%	Jun-15 Jun-14 var.%	Jun-15 Jun-14 var.%	Jun-15 Jun-14 var.%	Jun-15 Jun-14 var.%	Jun-15 Jun-14 var.%	Jun-15 Jun-14 Jun-15 Jun-14 var.%
Net premiums Net fees and commissions Financial income/expense (excl. Assets/ liabilities at fair value) Net interest Other income and expenses Realised gains and losses Unrealised gains and losses Net charges relating to claims Operating expenses Commissions and other acquisition costs Other expenses Other income / expense	3,820 4,624 -17.4 0 0 -129.8 504 320 57.8 184 215 40 32 246 112 34 -39 -2,597 -3,119 -16.7 -1,057 -1,188 -11.0 -840 -946 -11.3 -218 -242 -10.2 -136 -175 -22.4	4,269 5,227 -18.3 5 4 32.0 945 755 25.1 609 611 35 -7 258 145 44 7 -4,737 -5,591 -15.3 -194 -217 -10.5 -106 -132 -19.7 -89 -86 3.8 -38 -50 -23.7	8,090 9,851 -17.9 5 4 40.8 1,450 1,075 34.8 792 826 76 25 504 257 78 -33 -7,335 -8,710 -15.8 -1,252 -1,405 -10.9 -945 -1,078 -12.3 -306 -328 -6.5 -174 -225 -22.7	48 53 -9.9 101 113 -11.2 124 130 0 0 8 40 -32 -57 -148 -157 -5.6 -148 -157 -5.6 5 10 -47.1	14 8 77.8 -26 -21 -26.1 -24 -19 -4 -1 3 0 0 0 -56 -65 -13.9 -56 -65 -13.9 7 -85 -108.3	0 0 0.0 -48 -13 -262.8 -1 -1 20 19 -1 0 -67 -32 -14 -7 92.3 -14 -7 92.3 -19 -9 110.0	-5 -20 -61 -118 -21 -17 -20 -100 70 42 21 0 49 41 -4 96	8,090 9,851 -17.9 61 44 38.0 1,415 1,037 36.5 871 937 71 25 514 297 -41 -222 -7,335 -8,710 -15.8 -1,400 -1,593 -12.1 -925 -1,077 -14.2 -475 -516 -7.9 -184 -213 -13.5
Pre-tax profit (loss)	534 461 15.9	250 128 94.8	784 589 33.1	6 20 -70.3	-61 -163 62.5	-81 -30 -174.0	0 0	647 417 55.4
Income tax	-160 -154 3.9	-70 -51 37.8	-230 -205 12.3	-2 -13 -84.7	9 35 -75.5	22 7 238.0	0 0	-202 -176 14.6
Profit (loss) on discontinued operations	0 0	0 0	0 0	0 -1	0 0	0 0	0 0	0 -1
Consolidated profit (loss) for the period	374 307 21.9	179 77 132.4	553 384 44.1	4 6 -34.5	-52 -127 58.9	-59 -23 -155.9	0 0	446 240 86.1
Profit (loss) attributable to the owners of the Parent Profit (loss) attributable to non-controlling interests	255 103 191 136

(*) Real Estate business only includes real estate companies controlled by the Group

Balance Sheet by Business Segment

Amounts in €m

Non-Life Business	Life Business	Banking Business	Holdings/Other Businesses	Real Estate Business	Intersegment Elimination	T otal
30/6/2015	31/12/2014	30/6/2015	31/12/2014	30/6/2015	31/12/2014	30/6/2015	31/12/2014	30/6/2015	31/12/2014	30/6/2015	31/12/2014	30/6/2015	31/12/2014
1	INT ANGIBLE ASSET S	1,486.9	1,502.6	582.5	602.7	9.3	10.6	16.0	18.8	0.4	0.6	-1.8	-2.1	2,093.3	2,133.2
2	T ANGIBLE ASSET S	674.9	712.9	60.9	61.8	14.3	15.9	218.1	233.9	525.8	495.0	1.8	2.1	1,495.9	1,521.6
3	T ECHNICAL PROVISIONS - REINSURERS' SHARE	890.8	873.2	104.7	115.2	995.5	988.4
4	INVEST MENT S	16,921.5	17,617.3	49,121.3	48,225.9	11,474.4	11,713.3	1,239.9	424.1	1,136.5	1,263.2	-1,386.7	-1,297.8	78,507.0	77,946.0
4.1	Inv estment property	1,439.8	1,431.8	11.0	11.1	1.1	1.1	45.0	45.0	1,045.3	1,156.6	2,542.2	2,645.6
4.2	Inv estments in subsidiaries, associates and joint v entures	71.5	61.8	8.7	95.3	7.1	7.5	0.1	0.2	8.0	13.1	95.4	177.8
4.3	H eld-to-maturity inv estments	653.5	639.5	780.4	780.5	461.0	818.0	1,894.9	2,238.0
4.4	Loans and receiv ables	2,004.6	2,108.9	3,292.8	3,253.3	9,940.4	10,226.4	804.3	323.4	38.6	36.1	-1,380.1	-1,290.5	14,700.6	14,657.7
4.5	Av ailable-for-sale financial assets	12,507.3	13,257.1	34,901.1	34,375.0	929.6	652.5	378.5	43.5	44.6	57.4	-6.5	-7.3	48,754.6	48,378.1
4.6	Financial assets at fair v alue through profit or loss	244.7	118.2	10,127.3	9,710.6	135.3	8.0	12.1	12.0	10,519.3	9,848.8
5	SUNDRY RECEIVABLES	2,317.9	2,813.8	554.0	738.7	94.0	85.0	242.3	131.7	54.8	36.6	-301.3	-211.8	2,961.5	3,594.0
6	OT HER ASSET S	980.1	737.6	109.2	199.8	470.6	417.8	588.5	579.4	41.3	24.5	-126.1	-189.3	2,063.6	1,769.8
6.1	Deferred acquisition costs	34.5	27.3	47.2	48.3	81.7	75.6
6.2	Other assets	945.6	710.2	62.0	151.5	470.6	417.8	588.5	579.4	41.3	24.5	-126.1	-189.3	1,981.9	1,694.2
7	CASH AND CASH EQUIVALENT S	353.5	300.1	676.1	518.0	96.6	99.8	614.4	608.3	116.7	111.1	-836.1	-962.8	1,021.2	674.4
T OT AL ASSET S	23,625.6	24,557.5	51,208.5	50,462.0	12,159.2	12,342.5	2,919.2	1,996.2	1,875.6	1,930.9	-2,650.1	-2,661.8	89,138.0	88,627.3
1	EQUIT Y	8,106.2	8,439.8
2	PROVISIONS	482.8	557.8	29.9	24.6	18.0	16.8	531.7	511.7	18.0	22.4	-508.5	-490.1	571.9	643.2
3	T ECHNICAL PROVISIONS	17,270.3	17,636.0	44,941.6	44,258.7	62,211.9	61,894.8
4	FINANCIAL LIABILIT IES	1,606.2	1,819.9	2,941.4	2,800.3	10,870.7	11,151.7	1,892.0	1,280.4	162.9	164.0	-1,500.0	-1,756.9	15,973.2	15,459.4
4.1	Financial liabilities at fair v alue through profit or loss	64.9	184.6	2,159.6	2,002.2	86.0	84.5	3.0	2.6	2.6	3.3	0.0	0.0	2,316.1	2,277.1
4.2	Other financial liabilities	1,541.3	1,635.3	781.8	798.1	10,784.7	11,067.2	1,889.0	1,277.8	160.3	160.7	-1,500.0	-1,756.9	13,657.1	13,182.2
5	PAYABLES	849.2	774.1	198.9	195.6	154.8	74.9	229.6	97.0	52.3	55.4	-343.1	-264.0	1,141.7	933.0
6	OT HER LIABILIT IES	625.9	736.4	352.4	267.2	401.5	355.9	36.2	47.0	15.7	1.5	-298.6	-150.8	1,133.0	1,257.2
T OT AL EQUIT Y AND LIABILIT IES	89,138.0	88,627.3