AG Insurance Road Show Presentation March 2015 1 Disclaimer NOT - - PowerPoint PPT Presentation

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AG Insurance – Road Show Presentation March 2015

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Disclaimer

NOT FOR TRANSMISSION OR PUBLICATION IN OR INTO THE UNITED STATES OR TO U.S. PERSONS For the purposes of the following disclaimers, references to this "document" shall mean this presentation pack and shall be deemed to include references to the related speeches made by or to be made by the presenters, any questions and answers in relation thereto and any other related oral or written communications; references to the "Company" shall mean AG Insurance SA/NV; and references to the "Group" shall mean the Company and its subsidiaries taken as a whole. By attending the meeting where this presentation is made, or by reading this document, you agree to be bound by the following limitations. The information and the opinions in this document have been prepared by the Company solely for use at a meeting regarding a proposed offering (the “Offering”)

• f subordinated fixed rate reset dated notes expected to be issued by the Company (the “Notes”). This document and its contents are strictly confidential, are

intended only for use by the recipient for information purposes and may not be reproduced in any form or further distributed to any other person or published, in whole or in part, for any purpose. Failure to comply with this restriction may constitute a violation of applicable securities laws. In particular, the recipients of this document should not engage in any behaviour which would or might amount to market abuse or insider dealing for the purposes of any applicable laws or regulations. This document is an advertisement for the purposes of the applicable measures implementing Directive 2003/71/EC, as amended. It does not constitute or form part of, and should not be construed as, an offer to sell, or the solicitation or invitation of any offer to buy or subscribe for, the Notes in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. Any purchase of the Notes in the Offering should be made solely on the basis of the prospectus (as may be supplemented and amended) to be published in connection with the Offering (the “Prospectus”). The Prospectus, when published, will be available

• n the websites of the Company and of the Luxembourg Stock Exchange and in hard copy at the offices of the Company. An investment in the Notes will involve

certain risks. A summary of certain material risks relating to the Offering, the Company and the Notes will be set out in the section headed “Risk Factors” in the

• Prospectus. There may be additional material risks that are currently not considered to be material or of which the Company or its representatives are unaware.

You acknowledge that you will make your own assessment of the suitability of your investment in any securities with particular reference to your investment

• bjectives, experience and any other factors that you may consider relevant in investing in securities, and that you will seek your own independent financial, legal
• r tax advice where appropriate.

The Company has not authorised any offer to the public of Notes in any Member State of the European Economic Area. In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), an offer to the public of any Notes may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of any Notes may be made at any time under the applicable exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State. The expression Prospectus Directive means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and the expression 2010 PD Amending Directive means Directive 2010/73/EU. . Accordingly, the placement may not be advertised and the Prospectus, any offering materials and the Notes may not be distributed, directly or indirectly, to any individual or legal entity in a Relevant Member State other than in the circumstances set out in Article 3.2 of the Prospectus Directive, if they have been implemented in that Relevant Member State. Any securities to be issued have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state of the United States or other jurisdiction and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. Persons (as such terms are defined in Regulation S under the Securities Act) except in certain transactions exempt from the registration requirements of the Securities Act. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) other persons to whom it may lawfully be communicated.

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Disclaimer

The distribution of this document and other information in connection with the Offering in certain jurisdictions may be restricted by law. This document and any materials distributed in connection with this document are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident

• r located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which

would require any registration or licensing within such jurisdiction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This document contains certain "forward-looking statements" with respect to the Group's financial condition, results of operations and business and certain of the Group's plans and objectives with respect to these matters. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as "anticipates", "aims", “believes", “continue”, "could", "due", "estimates“, "expects", "goal", “intends", "may", “plans", “project”, “seeks”, "should", "targets", “will” and related and similar expressions, as well as statements in the future tense. By their very nature forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will or will not occur in the

• future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-

looking statements. These factors include, but are not limited to, changes in the economies and markets in which the Group operates; changes in the regulatory and competition frameworks in which the Group operates; the impact of legal or other proceedings against or which affect the Group; and changes in interest and exchange rates. All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to the Company or any

• ther member of the Group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. The Company may or may

not update these forward-looking statements. This document does not constitute an offer to sell, exchange or transfer any securities of the Company or any other person, a solicitation of any offer to purchase, exchange or transfer any such securities or any advice or recommendation with respect to any such securities in any jurisdiction. This document is the sole responsibility of the Company and has not been approved by any regulatory authority. The information contained in this document has not been independently verified. The information and opinions contained in this document are provided as at the date of this document and are subject to change without notice. Without prejudice to the above, to the fullest extent permitted by applicable law and regulation: (a) neither the Company nor any other member of the Group or persons acting on their behalf shall otherwise have any liability whatsoever for loss, howsoever arising, directly or indirectly, from use of the information contained within this document; and (b) neither the Company nor any other member of the Group or persons acting on their behalf makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained within this document. Without prejudice to the above, no reliance may be placed upon the information contained within this document, including to the extent that such information is subsequently updated by or on behalf of the Company or any member of the Group. Past performance of securities of the Group cannot be relied upon as a guide to the future performance of any securities of the Group. No representation, warranty or undertaking, expressed or implied, is or will be made by any investment bank involved with the Offering (each such investment bank, a “Manager”) or their respective affiliates, advisors or representatives or any other person as to, and no reliance should be placed on, the truth, fairness, accuracy, completeness or correctness of the information or the opinions contained herein (and whether any information has been omitted from this document). Each Manager and each of their respective directors, officers, employees, affiliates, advisors and representatives disclaims all liability whatsoever (in negligence

• r otherwise) for any loss however arising, directly or indirectly, from any use of this document or its contents or otherwise arising in connection with this
• document. Each Manager and their respective affiliates are acting for the Company and no one else in connection with the matters referred to in this document

and will not regard any other person as their respective clients in relation to such matters and will not be responsible to any other person for providing the protections afforded to their respective clients, or for providing advice in relation to such matters.

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Agenda

Overview of AG Insurance Key Investment Highlights Ratings and peers Proposed Transaction Concluding Remarks and Q&A Appendix

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OVERVIEW OF AG INSURANCE

Section 1

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AG Insurance – strong ownership structure

Ageas



AG Insurance core activity for Ageas. Main contributor in terms of balance sheet (54%) and Insurance net result (53%).



Net cash position (general account) at EUR 1,6 bio and a Group Solvency ratio amounting to 210%



Important progress in solving legacies and reducing complexity



Public company listed on Euronext Brussels



Rating: Baa3/BBB-/BBB+

BNP Paribas/BNP Paribas Fortis



AG Insurance is market leader in Belgium, one of the 4 core markets of BNPP (France, Italy, Belgium and Luxembourg)



Complementary activities (complete range of insurance products proposed by AG Insurance in Belgium) with bank activities of BNP Paribas thanks to the distribution agreement in place



Tight cooperation between Ageas and BNPP Cardif



BNP Paribas Fortis is100% owned by BNP Paribas (A2/A+/A+), public company listed on Euronext Paris

 #1 life and #2 non life

in Belgium

 Rated A-(Positive) /

A(stable) 75% 25% New 32NC12 issue

Legal structure

Significance of AG Insurance in Ageas (2014)

35% 65% AG Insurance Rest of Ageas group 53% 47% 54% 46%

Inflow Insurance net result Total assets

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KEY INVESTMENT HIGHLIGHTS

Section 2

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Key Investment Highlights

Well diversified and conservative investment portfolio

• Conservative asset mix with 77% in

bonds, of which 85% rated A or higher (market value)

Profitable growth in all P&C product lines

• Growth rate of inflows between 2013 and

2014 of 2.1%

• Combined ratio up due to extreme

weather events

Solid Financial Position

• Strong Solvency ratio: 210%* in 2014

(Solvency I)

Undisputed market leadership position in Belgium

• Number 1 in life, number 2 in P&C
• Twice the market size of the closest

competitor in life

Successful navigation of low interest rate environment

• Gradual lowering of guaranteed rates for

Savings products

• Liabilities & fixed income portfolio follow

similar run off pattern

Comprehensive product

• ffering, multi-channel

distribution & strategy

• Full life and non-life product range

covering all market segments

• Clearly defined strategy

Stable political and improving macro-economic outlook for Belgium

• Stable political environment and growth
• f GDP above Eurozone
• Low interest rate on government bonds

* Before dividend distribution of 2014, the Solvency I ratio is 189% as disclosed by Ageas.

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• 6,0
• 4,0
• 2,0

0,0 2,0 4,0 6,0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Stable political and improving macro-economic outlook for Belgium (1/2)

Source: Bloomberg; Europe based on European average consisting of European Union countries excluding Luxembourg

►

S&P improved the sovereign credit outlook for Belgium from negative to stable in February 2014

►

In February 2015 after accessing the fiscal policy of Belgium the European Commission concluded that opening Extensive Deficit Procedures are not warranted

Sovereign CDS spread performance (5yr, in bps) Growth of the GDP above Eurozone

Source: Eurostat Europe Belgium 20 40 60 80 100 120 140 160 180 200 jan/13 apr/13 jul/13

• kt/13

dec/13 apr/14 jul/14 sep/14 dec/14 Europe Belgium France Germany United Kingdom Netherlands

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High level of Savings Individuals net wealth compensates public and private deficit

848,7 879 901

• 355,4
• 355,7
• 398
• 287,7
• 346,8
• 369
• 1000
• 800
• 600
• 400
• 200

200 400 600 800 1000

2012 2013 2014

Stable political and improving macro-economic outlook for Belgium (2/2)

Stable political environment

Non-financial Corporations Individuals General Government Net Financial Wealth

Source: National Bank Belgium

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Undisputed market leadership position in Belgium

Market leading position Non-life insurance Life insurance

24,9% 12,1% 9,0% 8,6% 8,0% 5,4% 4,7% 2,2% 25,1% AG Insurance AXA KBC Ethias Belgius Allianz P&V Baloise Other

Life: #1 in Belgium (% Gross inflow)

16,3% 18,7% 8,3% 11,3% 4,8% 5,3% 6,2% 6,8% 22,3% AG Insurance AXA KBC Ethias Belgius Allianz P&V Baloise Other

Non-life: #2 in Belgium (% Gross inflow)

Source: Assuralia 2013

21,4% 14,8% 8,7% 9,7% 6,7% 5,4% 5,3% 4,0% 24,0%

AG Insurance AXA KBC Ethias Belfius Allianz P&V Baloise Other

Total: #1 in Belgium (% Gross inflow)

Total insurance

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Net profit attributable to shareholders (in EUR mio)

432,6 446,6 522,2 2012 2013 2014

Solid Financial Position(1/2)

Gross Inflow (in EUR mio) Embedded Value

5.127 4.101 3.963 1.759 1.855 1.893 2012 2013 2014 Non-Life Life 89 73 2013 2014 VANB 5.393 5.659 2013 2014

Embedded Value

13 2.450 2.516 4.716 5.277 2013 2014 Required Minimum Margin Available Solvency

Solid Financial Position (2/2)

Solvency I ratio*

210% 192%

2014 leverage (Subordinated liabilities as % of Total available capital) : 23%

EUR mio

EUR mio (as of 31 December) 2013 2014

Shareholders’ equity 4.902,0 6.251,4 Revaluation of AFS & HTM debt securities, 10% of equity securities, net of tax, net of shadow (1.722,2) (2.693,1) Revaluation of real estate to fair value (90%), net of tax 751.9 789,7 Other* (392,3) (303,8) Subordinated liabilities 1.177,1 1.233,1 Total available capital 4.716,5 5.277,3

Available capital

* Non-controlling interests, intangible assets equalisation reserve and other

Figures in EUR mio Impact on income statement Impact on Shareholders’ equity Impact on Solvency I ratio

Interest rate risk – down 22,7 1%-pts Interest rate risk - up (89,2) (4)%-pts Equity securities market risk (190,6) (558,0) (22)%-pts Real estate risk (207,1) (273,4) (11)%-pts Spread risk (6,7) (620,7) (25)%-pts

The table shows the (net of income tax) impact, as determined at year-end, of stress testing on the income statement and on shareholders’ equity using scenarios that may occur

• nce every 30 years:

Interest rates: decrease of around 3 bps for the very short end of the yield curve (one year), 10 bps on the short end of the yield curve (up to ten years) and 40 bps on the long end; increase of 75 bps. Equity securities: decrease in fair value with 33% (non-listed equities with 40%). Real estate: decrease in fair value with 18% (33% for indirect investments). Spread risk: factor times duration. The factor ranges from 70 bps for AAA to almost 2 % for BBB corporates.

Capital sensitivity

* Without the expected dividend of 2014, the Solvency I ratio is 189% as disclosed by Ageas.

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Comprehensive product offering, multi-channel distribution & strategy (1/2)

Life insurance Non-life insurance

Savings

• Universal

Life

• Fiscal

Products

Traditional

• Primarily

Death Cover Insurance

Unit Linked Group Life P&C

• Motor
• Property
• Third Party liability
• Legal Assistance

Accident & Health

• Accident including Workmen’s

compensation

• Disability
• Health Care

Distribution mix Strategy Product mix

Bancassurance Broker B2B

Bank Channel Broker Channel Employee benefits & health care channel

Non-Life (P&C) Life Life Non-Life

(P&C/Workmen’s compensation)

Health Care** Employee Benefits Development Life Development Non-Life * Source : Assuralia 2013.

• AG Insurance is collaborating with BNP Paribas Fortis (900 Branches) and Bpost Bank (680

Offices) representing a broad distribution network in Belgium

• Bank channel represents 33% of Life and 8% of Non-Life distribution mix in Belgium in 2013*

Bank Channel

• Distribution is ensured by around 3.500 independent brokers and Fintro Agents
• Brokers channel represents 30% of Life and 58% of Non-Life distribution mix in Belgium in 2013*

Broker Channel

** Health Care Individual also distributed through broker and bank channel

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Multi- channel distribution

Enhance cross-selling strategy and exploit untapped distribution synergies  Enhance cross-selling with BNPP Fortis  Explore new channels and partnerships

Product & Service Leadership

Continue product and service leadership in Life and Non-Life …  Strengthen Non-Life offering for Retail & SME market (e.g. packs)  (Structured) unit-linked products in Individual Life … with a focus on market segments with high potential:  Non-Life: Re-enter market for medium-sized companies  Group Life & Health Care: penetrate segment below top 300 companies, currently not being well served and sector plans Further implement operational excellence strategy  Continue platform reengineering in Group Life  Further unroll lean projects: a long-term approach not primarily focused on costs but on efficiently providing what the customer wants

Operational Excellence

CUSTOMER CENTRIC

Product & Service Leadership

Operational Excellence

► To be a leading and profitable multi-distribution service provider of insurance products ► To strengthen our market leadership position in our three main market segments: Life, Group Life, and Non-Life

Comprehensive product offering, multi-channel distribution & strategy (2/2)

MISSION

By focusing on 3 strategic levers:

Multi- channel distribution

Source : AG Insurance website.

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Managing guarantees in a low interest rate environment

Gradual lowering of guaranteed rates for Savings products

►

2014: as from 1/09/2014 the guaranteed rate is at 1.00%

►

Guaranteed rates new premium follow evolution of Belgian OLO

►

Total Life liabilities: average guaranteed rate went down during the 2014 period

►

Average guaranteed rate will further go down thanks to new contracts at lower guaranteed rates

►

Liabilities & fixed income portfolio follow similar run off pattern

►

75 - 100 bps gross investment margin between yield fixed income portfolio & guaranteed i-rate. Return on equities & real estate may offer additional margin opportunities

►

Guarantees above 4% benefit from extra coverage, representing additional margin on total provisions

►

Part of margin returned as discretionary profit sharing

►

Protection in case of rising yields on liabilities (Market Value Adjustment clause) & on assets (hedging strategies)

Successful navigation of low interest rate environment (1/2)

Interest Guarantees vs. yield OLO 10 years

Source : Website Ageas – Full year 2014 result presentation.

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►

The existing portfolio is well-matched

►

The cash flow gap and the duration gap are limited

►

Both indicators are closely monitored on a monthly basis

►

The duration gap remains very low end 2014 and has even decreased compared to 2013

Successful navigation of low interest rate environment (2/2)

Existing portfolio – Global account: cash-flow matching

2012 2013 2014

Guaranteed interest rate 2,89% 2,80% 2,72% Fixed income yield 4,03% 3,97% 3,84% Duration gap (0,12) (0,16) (0,06)

Source : Website Ageas – Full year 2014 result presentation.

18 36,8% 36,7% 37,6% 62,7% 63,2% 63,6% 2012 2013 2014 Claims ratio Expense ratio

Profitable growth in all P&C product lines

Consistent inflow growth (in EUR mio)... …across our two major business lines (2013-2014)

2,8% impact of the June 2014 hailstorm

Operating performance in Non-life: Combined ratio up due to extreme weather events

1.855 1.893 2013 2014 2,78% 1,93% Household Motor

99,5% 99,9% 101,2% 98,4%

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Well diversified and conservative investment portfolio

Bonds size: EUR 51.9 bio*

►

In challenging market conditions, economic asset mix evolving towards:

• less cash
• less sovereigns
• more credits & (infrastructure) loans

►

Thanks to diversification into corporate bonds & loans, investment yield resilient to general decrease of market yield

Total EUR 51.9 bio 49% 29% 8% 5% 4% 4% 1% Sovereign bonds Other bonds Loans Real estate Other assets Equities Cash & Cash equivalent

Bond portfolio by country Bond portfolio by sector Split by ratings

Government 62% Bank and Finance 19% Corporate non Fin 19% Structured Credit Instruments 0%

Government Corporate non financial Banks and

• ther

financial institutions Total AAA 15% – 45% 18% AA 76% 12% 32% 55% A 4% 36% 15% 12% BBB 5% 49% 8% 14% BB or lower 0% 3% 0% 1% unrated 0% 0% 0% 0%

Total size: EUR 67.5 bio*

* Excluding Investments on behalf of policyholders. All assets at fair value except the ‘Held to Maturity’ assets and loans which are valued at amortized costs

2014 Total investment portfolio Of total bond portfolio, 85% rated A or higher

25% 4% 8% 7% 18% 38% Other countries Italy Germany Austria France

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RATING AND PEERS

Section 3

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Strong rating position…

S&P Financial Strength Rating A- Positive outlook Counterparty Credit Rating A- Positive outlook Last review 14 October 2014 Fitch Insurer Financial Strength A+ Stable outlook Long term Issuer Default Rating A Stable outlook Last review 10 December 2014

“Standard & Poor's Ratings Services said today it revised to positive from stable its outlooks on Belgium-based insurance group Ageas' core subsidiary AG Insurance and holding company Ageas SA/NV. At the same time, we affirmed the 'A-' financial strength rating and issuer credit rating on AG Insurance and the 'BBB-' issuer credit rating on Ageas SA/NV. […]. We assess Ageas' business profile as strong based on its strong competitive position in Belgium, through AG Insurance, complemented by business positions in multiple markets. Our assessment is supported by the strong bancassurance ties the group retains in Belgium, and by its product diversification between life and property/casualty.” (P/C). S&P, December 20, 2013) “On Oct. 14, 2014, Standard & Poor's Ratings Services affirmed its 'A-' financial strength and counterparty credit ratings on AG Insurance, the core operating subsidiary of Belgian insurance group Ageas. The affirmation reflects our view of the group's strong business risk profile and very strong capital and earnings, despite first-half 2014 earnings falling short of our expectations.” (S&P, October 14, 2014) “The ratings of AG Insurance benefit from its strong solvency. Its regulatory solvency margin was 192% at end-2013, and group solvency was 214%. Fitch expects solvency to remain good, supported by retained earnings. […]. AG Insurance is the largest insurer in Belgium. Access to extensive and diversified distribution channels, including the banking network of BNP Paribas Fortis (Long-Term IDR: A+/Stable), is a key positive rating factor.” (Fitch, December 10, 2014)

Expected rating of the New Instrument S&P BBB “Intermediate” Fitch BBB+

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Issuer/Issue Name

Country Fitch Long Term Rating Standard & Poor’s

AG Insurance

BEL A  A- +

AEGON N.V.

NLD A  A- 

AXA

FRA A  A- +

Allianz SE

DEU AA-  AA 

Assicurazioni Generali SpA

ITA BBB+ 

ING Group N.V.

NLD A

• A-
• KBC Group N.V.

BEL A-  A-

• CNP Assurances

FRA A 

Talanx AG

DEU A- 

…particularly when compared with peers

Positive Negative Evolving Stable Outlook + –  Watch N/A

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PROPOSED TRANSACTION

Section 4

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Shareholders’equity

EUR mio (as of 31 December) 2013 2014

Share capital 526,6 526,6 Share premium reserve 231,5 231,5 Retained earnings 2.202,9 2.662,0 Unrealised gains and losses 1.941,0 2.831,3 Shareholders’ equity 4.902,0 6.251,4 Subordinated Loans 1.177,1 1.233,1

Hybrone on-loan* Peppermint Ambleve

Borrower AG Insurance AG Insurance AG Insurance Lender Ageas SA/NV Third Party Investor BNP Paribas Fortis/Ageas Group Issue Date 20/06/2006 21/03/2013 18/12/2013 Maturity Perpetual Perpetual 18/06/2044 First Call Date 20/06/2016 21/03/2019 18/06/2024 AG Insurance has the right to request redemption of the loan on the first call date. If not redeemed on their first call date, loans can be redeemed on every subsequent coupon payment dates - No redemption at the request of the Lender at any time. Nominal value 500.000.000 EUR Outstanding: 336.364.000 550.000.000 USD 450.000.000 EUR Coupon 5,16% 6,75% 5,25% Coupon Payment Annually Semi-annually Annually Coupon after First Call Date EURIBOR 3M + 2,03% 6Y USD Mid Swap Rate + 5,433% EURIBOR 3M + 4,136% Coupon Payment after First Call Date Quarterly Semi-annually Quarterly Early Repayment in case of Tax Event or Capital Disqualification Event Yes Yes Yes

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AG Insurance redemption profile pro-forma for EUR 32-nc-12 new issue

2015 2016 2017 2018 2019 2020 2021 2022 2024 2025 2026 2027

AG Insurance redemption profile pro -forma

Perpetual Dated

Hybrone €336.4mm Perp-nc-2016 5,125% Peppermint $550.0mm Perp-nc- 2019 6,750% Ambleve €450.0mm 2044-nc-2024 5,250% New Issue € 32-nc-12

New EUR 32-nc-12

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►

The new issue will pre-finance redemption of the Hybrone on-loan which has a first call date on 20 June 2016 with a new dated hybrid instrument targeting Solvency II Tier 2 compliance

►

This transaction will:

• Pro-actively lock-in refinancing of the Hybrone instrument at an attractive level
• Establish the AG Insurance credit with the Euro institutional investor base
• Optimise AG Insurance’s capital structure under the Solvency II regime via the

issuance of Tier 2 hybrid capital

• Decrease the weighted average cost of capital

►

Simultaneous tender offer by Ageas Hybrid Financing (“AHF”) of the outstanding €500m (€336.4m o/s) 5,125% Fixed to Floating Rate perpetual securities callable from 20 June 2016 (the “Existing Notes”)

• AHF is offering to repurchase any and all of the Existing Notes at a fixed tender

price of [X]

• The new issue will be co-ordinated with the purchase of Existing Notes

Rationale for issuance and key investment highlights

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Item Solvency II Tier 2 Requirements Aligned with Rating Agency Requirements Issuer

• AG Insurance SA/NV

Notes

• €[l]m Fixed Rate Reset Dated Subordinated Notes

Maturity

• Year [32] subject to compliance with the Solvency Condition and the Regulatory Deficiency Event

Status

• Junior to the claims of all unsubordinated creditors, policy holders and beneficiaries of the Issuer;
• Pari passu with (i) Tier 2 Capital and (ii) all obligations which rank, or are expressed to rank, pari passu therewith; and
• Senior to (i) share capital of the Issuer, (ii) any obligations which rank junior to the Notes (including the $550m PerpNC6) and (iii) Tier 1 Capital

(“Junior Securities”) Interest

• Fixed rate until [l] (the “First Call Date”) payable annually in arrear. Thereafter reset on the First Call Date and every reset date thereafter to the sum
• f relevant mid swap rate, the initial credit spread and the step-up
• Step-up after year 12 of 100bps (provided it is less than 50% of the initial credit spread at issuance)

Interest Deferral/ Cancellation

• The Issuer may elect to defer any interest payment on a cumulative basis provide the Issuer has not made or declared a distribution or dividend on

any Junior Securities in the previous 6 months

• Interest will be mandatorily deferred upon a Regulatory Deficiency Event or non-compliance with the Solvency Condition
• Deferred interest payments will constitute Arrears of Interest which will themselves bear interest

Arrears of Interest

• Arrears of Interest may be paid at any time and must be paid on the earlier of (i) redemption of the Notes; (ii) winding-up of the Issuer; (iii)

redemption or repurchase of any share capital of the Issuer; or (iv) the Issuer declares or pays a dividend on any Junior securities Optional Redemption

• The Issuer may redeem all of the Notes at par on the First Call Date and any interest payment date thereafter
• All redemptions are subject to regulatory approval, compliance with the Solvency Condition and the Regulatory Deficiency Event
• Upon a Special Event, the Issuer may redeem all of the Notes at 100% of their principal amount prior to the First Call Date or at par thereafter
• If the Issuer elects to redeem the Notes prior to the 5th year, any such redemption or purchase must be in compliance with regulatory requirements

and the Notes must be exchanged or converted into another Tier 2 instrument or funded out of the proceeds of issue of regulatory capital of the same or higher quality as the Notes Special Events

• (i) Full regulatory disqualification of the Notes from Tier 2 capital of the Issuer, (ii) Loss of Tax Deductibility, (iii) Notes subject to Withholding Tax,

and (iv) Change in ratings agency equity treatment of the Notes Regulatory Deficiency Event

• Insufficient own funds regulatory capital to cover the relevant capital requirements
• Regulator requests that the Issuer defers payment

Solvency Condition

• The Issuer is able to pay its debts to senior and parity creditors as they fall due, credit has not been imperilled within the meaning of Article 2 of the

Belgium Law on Bankruptcy and the total assets exceed total liabilities (other than liabilities to junior creditors) Law

• English except for the Status condition which shall be governed by Belgium Law

A high level overview of the terms – SII Style Tier 2 32NC12 - Termsheet

28

CONCLUDING REMARKS AND Q&A

Section 5

29

Concluding remarks

• Strong franchise and #1 market share in Belgium
• Core entity within Ageas Group
• Well-diversified and conservative investment

portfolio and strong solvency position

• Resilient performance, strong country backing, and

sound and stable ratings

• Adequate investment margin, normalized combined

ratio under 100% thanks to rigorous underwriting process

AG Insurance

• An attractive opportunity to invest in the top

insurance company in Belgium

• Longest call date of any Euro insurance hybrid bond
• ffers attractive additional duration and yield

The proposed transaction

30

Investor Relations

Contact: Hervé Votron Tel: + 32 2 664 06 01 E-mail: ir@aginsurance.be Website: www.aginsurance.be

31

APPENDIX

Section 6

32

Ageas: Company profile - Active in 12 countries in Europe & Asia

* Inflow included non-consolidated partnerships @ 100%

Belgium – 75%

► Life: €3.963 mio (#1) ► Non-Life: €1.893 mio (#2)

UK – 100%

► Life: €138 mio - sold ► Non-Life: €2.260 mio (#2 in

Motor) Portugal

► Life–51%: €1.352 mio (#1) ► Non-Life–100%: €264 mio

Italy – 50%

► Non-Life: €217 mio

(#1bancassurance) Turkey – 36%

► Non-Life: €590 mio (#4)

India – 26%

► Life: €109 mio

China – 25%

► Life: €8.177 mio (#7)

Hong Kong – 100%

► Life: €481 mio

Thailand

► Life–31%: €1.744 mio (#1) ► Non-Life–15%: €235 mio (#4)

Malaysia – 31%

► Life: €568 mio (#5) ► Non-Life: €587 mio (#5)

France – 100%

► Life: €362 mio

Luxembourg – 33%

► Life: € 2.841 mio (#1 FOS)

33

Strong expertise and presence on Belgian market since 1824

1824

Creation of a life insurance company “Maatschappij van Algemene Verzekeringen op het Leven, de Dotale Fondsen en de Overlevingen”

1830:

Creation of a non-life company “Maatschappij van Algemene Verzekeringen tegen Gevaren van Brand”

1971:

Acquisition of the “Compagnie d’Assurance Maritime et d’Incendie d’Anvers Securitas”

1986

Absorption of AG van 1830

1990

Absorption of AG van 1824

1999

Fortis AG SA/NV

2006

Merger Fortis AG + “les Assurances de Fortis Banque SA”: Fortis Insurance Belgium

2008/2009

Fortis Bank and Fortis Insurance Belgium were separated; leading to selling all the banking activity to amongst others BNP Paribas, the BNP Paribas group acquired 25% of Fortis Insurance Belgium After Fortis disentanglement Fortis Insurance Belgium is the most important company in Fortis Holding (renamed in April 2010 into Ageas)

06/2009

New brand name: AG Insurance

34

A well-diversified and highly experienced management team

Board of Directors

Jozef De Mey Chairman - Ageas Bart De Smet Vice-chairman - Ageas Xavier de Walque Renate Krümmer Renaud Dumora Barry Smith Lionel Perl Peter Vandekerckhove - BNPP Daniël van Woensel + Management Committee’s members

Chief Executive Officer Antonio Cano Chief Investment Officer Wim Vermeir Chief Financial Officer Hans De Cuyper Risk Management & Compliance Heidi Delobelle Bank Channel and Life insurance Development Benny De Wyngaert Internal Audit Anne-Catherine Reul Business Development Edwin Klaps Business Operating Office Philippe Van Belle Communication & Human Resources Raphaël Copis Broker Channel and Non-life insurance Development Philippe Landrain EB/HC Channel Jean-Michel Kupper Management Committee’s members

35

EUR mio (as of 31 December) 2012 2013 2014 Gross inflow Life 5.126,6 4.101,0 3.963,0 Gross inflow Non-Life 1.759,0 1.854,8 1.893,0 Life technical result 354,0 329,9 287,2 Non-life technical result 95,7 89,3 69,3 Total technical result 449,7 419,2 356,5 Capital gains (losses) allocated to operating margin 128,4 122,1 163,5 Operating margin 578,1 541,3 519,9 Other result 82,9 72,2 110,7 Profit before taxation 661,0 613,5 630,6 Income tax expenses (223,6) (161,5) (101,0) Net result for the period 437,4 452,0 529,7 Attributable to non-controlling interests (4,8) (5,5) (7,4) Net profit attributable to shareholders 432,6 446,6 522,2

Consolidated income statement

36

Consolidated balance sheet

EUR mio (as of 31 December) 2012 2013 2014

ASSETS Cash and cash equivalents 889 686 799 Trading assets 23 Investments 50.095 49.268 54.840 Government Bonds 30.329 29.366 32.200 Other Bonds 17.977 17.370 19.714 Equity securities 1.789 2.532 2.927 Loans 3.748 4.712 5.269 Real estate 3.428 3.334 3.648 Investment property 2.392 2.332 2.608 Property & plant 1.036 1.001 1.040 Other assets 2.737 3.032 2.990 Investments on behalf of policyholders 6.035 6.400 6.713 TOTAL ASSETS 66.956 67.432 74.260 LIABILITIES Trading liabilities 5 49 Tax liabilities 1.269 1.085 1.453 Borrowings 1.658 1.907 1.978 Non OBO policy and claim reserves 50.073 50.320 54.582 Subordinated liabilities. 896 1.171 1.233 Other Liabilities 1.596 1.520 1.764 Liabilities on behalf of policyholders 6.035 6.400 6.713 Total Liabilities 61.527 62.407 67.772 Equity Shareholders' Equity 5.299 4.902 6.252 Minority interests 129 123 237 Total Equity 5.428 5.025 6.488 TOTAL LIABILITIES & EQUITY 66.956 67.432 74.260

37

EUR mio (as of 31 December) 2013 2014

AAA

4.265,0 4.853,7

AA

22.454,0 24.363,6

A

796,0 1.325,9

BBB

1.788,2 1.592,0

Total investment grade

29.303,2 32.135,1

BB or lower

63,1 63,7

Unrated

0,2 0,8

Total non-investment grade and unrated

63,3 64,5

Total government bonds

29.366,5 32.199,5

Additional information on the quality of Government Bonds

15% 76% 3% 6% 0% 0% AAA AA A BBB BB or low Unrated 15% 76% 4% 5% 0% 0%

38

EUR mio (as of 31 December) 2013 2014

AAA AA

996,1 1.166,6

A

3.016,7 3.497,2

BBB

2.998,9 4.749,6

Total investment grade

7.011,6 9.413,4

BB or lower

214,9 219,9

Unrated

79,0 37,5

Total non-investment grade and unrated

293,9 257,4

Total corporate bonds

7.305,5 9.670,8

Additional information on the quality of Corporate Bonds

0% 14% 41% 41% 3% 1% AAA AA A BBB BB or low Unrated 0% 12% 36% 49% 2% 0%

39

EUR mio (as of 31 December) 2013 2014

AAA

4.307,6 4.422,8

AA

3.344,5 3.112,4

A

1.407,5 1.464,3

BBB

587,4 778,5

Total investment grade

9.647,0 9.778,0

BB or lower

26,9 4,9

Unrated

34,3 9,7

Total non-investment grade and unrated

61,1 14,6

Total banks and other financials

9.708,1 9.792,6

Additional information on the quality of bonds of banks and other financial institutions

44% 35% 14% 6% 0% 0% AAA AA A BBB BB or low Unrated 45% 32% 15% 8% 0% 0%

40

Additional information on the quality of Structured credit instruments

EUR mio (as of 31 December) 2013 2014

AAA 166,6 132,4 AA 23,7 19,5 A 93,8 34,9 BBB 1,7 0,0 Total investment grade 285,8 186,8 BB or lower 0,0 0,0 Unrated 62,2 61,6 Total non-investment grade and unrated 62,2 61,6 Total Structured credit instruments 348,0 248,4

44% 34% 14% 6% 0% 0% AAA AA A BBB BB or low Unrated 45% 32% 15% 8% 0% 0%

41

Real Estate Portfolio – AG insurance is the Belgian leader

Well diversified Real Estate Portfolio ►

Well diversified investments:

►

Offices

►

Retail

►

Logistics

►

Nursing homes

►

Car parks across Europe

►

International:

►

Belgium

►

France

►

Luxembourg

►

Spain, Germany, Italy, the Netherlands (only for Interparking*)

Real Estate (Fair value, EUR mio) 2013 (Economic) 2014 (Economic) Variation

Investment property 2.332 2.607 +275(+12%) Land and buildings held for own use 922 941 +19(+2%) Buildings held for resale 155 60

• 95(-61%)

Real Estate funds 460 429

• 31 (-7%)

Other indirect 600 736 +136 (+23%) Unrealised Capital Gains 1.266 1.331 +65 (+5%) Total Real Estate (Fair value) 5.735 6.104 +369 (+6%)

* AG Insurance owns 51% of Interparking

42

Concentration risk - 2014

31 December 2014 Government Bank of Finance Other corporate Structured credit instruments Total Belgium 18.837,7 119,1 696,6 2,1 19.655,5 France 5.448,6 2.018,0 2.133,0 15,7 9.615,3 Germany 1.254,0 1.791,5 856,4 44,3 3.946,2 Austria 2.701,2 436,0 452,5 3.589,7 Supranational 200,6 2.366,7 2.567,3 Italy 1.078,1 166,0 625,0 34,9 1.904,0 Spain 568,4 547,0 376,1 1.491,5 Netherlands 481,1 396,2 536,7 54,2 1.468,2 UK 267,8 897,6 9,8 1.175,2 United States 26,9 645,2 454,4 25,7 1.152,2 Ireland 555,7 16,1 108,3 680,1 Australia 215,7 394,4 610,1 Finland 215,6 92,5 144,4 452,5 Slovakia 275,7 167,8 443,5 Sweden 168,6 260,1 428,7 Czech Republic 234,6 48,0 282,6 Switzerland 102,5 177,3 279,8 Poland 253,9 4,5 15,5 274,0 Norway 121,5 88,5 210,0 Mexico 8,4 181,4 189,8 Denmark 23,2 142,2 165,4 Brazil 19,7 108,3 128,0 Luxembourg 21,1 105,9 127,0 Other European countries 9,1 38,1 63,5 110,7 Asia 72,9 288,6 361,5 Other countries 37,3 155,3 348,3 61,6 602,5 Total Debt securities 32.199,5 9.792,6 9.670,8 248,3 51.911,2