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Strategy and outlook

CNP Assurances . Strategy and outlook. Gilles BENOIST President of the Executive Board 20 March 2003. CONTENTS. How did CNP succeed in remaining one step ahead in last year's falling stock markets? Strategy Focus on the most profitable products

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Strategy and outlook

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  1. CNP Assurances Strategy and outlook Gilles BENOISTPresident of the Executive Board20 March 2003

  2. CONTENTS How did CNP succeed in remaining one step ahead in last year's falling stock markets? • StrategyFocus on the most profitable products • InternationalBrazil: strong potential for future business and value growth • Outlook

  3. THE FRENCH PERSONAL INSURANCE MARKET:1% GROWTH IN 2002 In €bn - 6 % + 1 % • In 2000, market boosted by substantial transfers from bank-type PEP accounts • Savings market up 1% in 2002 to €84.8bn (source: FFSA Feb. 2003) • 2003 outlook: 0% to 5% growth according to FFSA 99.6 94.8* 93.4 Transfersfrom PEPaccounts PEP PEP PEP * : estimate 2000 2001 2002

  4. CNP ASSURANCES OUTPERFORMED THE FRENCH MARKET In €bn • Premium income up 5.3% on a constant structure and exchange rate basis (4.3% excluding Brazil), versus 1% growth in the French market as a whole + 6.2% - 1.3% 18.36 17.52 17.29 2000 2001 2002

  5. RECURRING NET PROFIT UP 8.1%* In €m + 8.1% 571.1 + 12.2% 528.3 470.9 2000 2001 2002 * Like-for-like growth: 11.3%

  6. 2002 RECURRING NET PROFIT In €m Excluding consequences of falling stock markets Change 2002 / 2001 Change excl. Brazil 2002 Premium income18,360 + 6.2% +4.3% Technical reserves* 140,810 + 7.3% + 7.1% Admin. expenses542 + 6.8% + 3.5% Recurring profit 903 + 14.4% + 9.7% Tax on recurring profit213 + 14.0% + 10.1% Recurring net profit571 + 8.1% + 8.1% * Average annual increase

  7. WHAT ARE THE REASONS FOR CNP'S RESILIENCE? • Low portfolio weighting in equities (13%),unchanged for several years • Investment in equities dependent on having sufficient unrealised gains to protect against a sharp drop in share prices • In 2000 and 2001, portfolio underweighted in TMT stocks • Partial hedging programme set up alongside equities purchases in 1999 and 2000 • Exceptional profits from 1999 and 2000 tender offers set aside and used to offset provision charges in 2002

  8. CONSEQUENCES OFFALLING STOCK MARKETS CNP Assurances treatment of the stock market crisis in 2002 • Trigger point for liquidity risk reserve lowered • Realised gains on equities: 9% of profit • Losses realised • Method used to calculate provisions for permanent impairment in value adjusted to reflect actual impairments more accurately, in accordance with CNC guidelines of 18 December 2002: €685m • Liquidity risk reserve booked by Ecureuil Vie: €504m • No postponement or deferral requested

  9. FINANCING OF PROVISIONS BOOKED IN 2002 • Lower proportion of investment income allocated to policyholders • Transfer from policyholders' surplus reverse • Policyholders' surplus reserve at end-2002: around €1bn • Profit-taking on bonds to offset liquity risks reserve booked by Ecureuil Vie • After detailed analysis of ALM issues • coverage of commitments • portfolio yields • higher interest rates scenario • Continued disciplined approach to determining policyholder rates of return

  10. HIGH QUALITY ASSETS in €m • Bonds: 98% rated A or better and 0.5% non-investment grade • Assets excluding unit-linked: €132,185m Unrealised gains 30 June 2002 Unrealised gains 31 Dec. 2002 Book value 31 Dec. 2002 Breakdown(excl. U-L) Property812 918 4,032 2.6% Bonds3,057 6,371 112,272 84.1% Equities3,015 (785) 27,692 13.3% Total 6,884 6,504 143,996 100% Very high quality assets:

  11. FINANCIAL STRATEGY • Response to a sharper fall in interest rates • Change in weighted guaranteed minimum yield on In Force business at end-2002 • Good coverage of guaranteed minimum yields 3% 2.5% CNP Group at 100% 2% 1.5% 1% 0.5% 2013 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

  12. RESILIENT EMBEDDED VALUE • Decline in in force business in 2002 due in part to reduction in tax credit • New business : France €0.60 per share Total €0.77 per share €42 per share * € / share In force (2) 7.6 AdjustedNAV (1) 34.4 CAC 40 31 Dec. 2002 Number of shares at 31 Dec. 2002: 137,854,064 * After dividend and after deducting Caixa Seguros goodwill (1) NAV used to calculated Embedded Value equals book NAV less in force and Brazil tax benefit(2) €6.9 France and €0.6 Brazil

  13. SOLVENCY MARGINat 31 December 2002 New presentation : European standards In €m • Solvency margin represents 2.21 times regulatory minimum 6,425 Unrealised gains(2) Subordinated debt 1,153 107% Minimum margin requirement Shareholders' equity(1) incl. capitalisation reserve 5,643 4,903 (1) After dividends and after deducting intangible assets(2) Unrealised gains calculated according to European standard after restatement

  14. CONTENTS • How did CNP succeed in remaining one step ahead in last year's falling stock markets? StrategyFocus on the most profitable products • InternationalBrazil: strong potential for future business and value growth • Outlook

  15. STRATEGY • Individual insurance • In partnership with the distribution networks • Focus on the most profitable types of business • Build sales of personal risk products (health insurance, personal risk insurance • Boost unit-linked sales • guaranteed funds

  16. PREMIUM INCOME BY BUSINESS SEGMENT In €m Build personal risk sales Like-for-like change Change / 2001 2002 Savings14,279 + 5.8% + 5.5% Pensions1,154 - 2.2% - 4.4% Personal risk967 + 17.0% + 17.1% Loan insurance1,555 + 6.0% + 2.5% Health insurance195 + 10.7% + 10.7% Property & Casualty211 + 40.9% + 17.4% Total 18,361 + 6.2% + 5.3%

  17. ROE based on recurring profitBY BUSINESS SEGMENT (excl. Brazil) Build personal risk sales €m ROE (1) Savings358.2 12% Pensions73.4 14.5% Personal risk (2)149.0 17% Total580.6 13.3% 1 Average shareholders' equity is allocated among the business segments pro rata to regulatory solvency margins 2 Including loan insurance and health insurance

  18. STRATEGY Build personal risk sales • Group insurance • Capture additional market share: • leverage opportunities in the health insurance and pensions markets • partner the reconfiguration of mutual insurance companies and health insurance providers • develop a loan insurance offering for consumer loans

  19. PERSONAL RISK PRODUCTS Build personal risk sales Premiums €m 1st half 2002 Individual/group Network 11 Aviposte 8 Resolys /Premunys / Seralys 5 Compte Prévoyance 10 Urgence et Famille PERSONAL RISK 104 Group policies (companies) Group policies (mutual insurers and local authorities) 235 39 Brazilian products Group policies (financial institutions) 485 LOAN INSURANCE 73 Group policies (mutual insurers and local authorities) 87 Brazilian products Complétys Santé 1 HEALTH INSURANCE Group policies (companies) 81 Group policies (mutual insurers and local authorities) 7

  20. INCREASED SALES OFUNIT-LINKED PRODUCTS Build unit-linked sales Individual insurance In €m % Savings turnover Change2001 2002 2001 602 952 - 37% 9% 1,575 924 + 70% 23% 49 197 - 75% 7% Total * 2,262 2,117 + 6.8% 16% * Including unit-linked sales via other channels (Véga Finance, etc.)

  21. PRODUCT NEWS Build unit-linked sales Nuances 3D unit-linked contract a resounding success • Launch decided in November 2000 when agreement with Savings Banks was negotiated • Launched in October 2001 • First-half 2002 premium income:€1.88bn o/w €0.9bn in unit-linked • Reasons for success • asset allocation assistance (Horizon formula) • Innovation prize in March 2002 (le Revenu)

  22. CONTENTS • How did CNP succeed in remaining one step ahead in last year's falling stock markets? • Strategy Focus on the most profitable products InternationalBrazil: strong potential for future business and value growth • Outlook

  23. ROBUST GROWTHIN BRAZIL In BRLm Brazil: Caixa Seguros Change(2) 2002 / 2001 2002 Savings585 + 53% Pensions269 + 36% Personal risk274 + 106% Loan insurance391 + 47% Property & Casualty301 + 43% Total 1,820(1) + 53% • €643m • Up 53% in BRL and 5.5% in euros on a full-year basis compared with 2001

  24. BRAZILUpdate on the Caixa Seguros acquisition • Value of 2002 new business, including tax benefit:BRL 137m • Excluding currency effect = Accretive impact in 2002 • Currency effect: • €9.5m dilutive effect in 2002 • translation adjustment: - €60m (€0.4/share) • goodwill impairment test: no impairment

  25. BRAZILUpdate on the Caixa Seguros acquisition • Goodwill deducted from embedded value • Partial hedging of book goodwill to be continued in 2003 Goodwill

  26. BRAZILUpdate on the Caixa Seguros acquisition • Exclusive 20-year agreement with Brazil's second largest banking network, Caixa Economica Federal • Business development • Highly committed sales network • Revamped product offer • Massive reduction in operating costs Outlook

  27. CONTENTS • How did CNP succeed in remaining one step ahead in last year's falling stock markets? • Strategy Focus on the most profitable products • InternationalBrazil: strong potential for future business and value growth Outlook

  28. CURRENT ISSUES • Pensions reform in France • New product opportunities arising from the proposed reform? • Individual pension products

  29. DIVIDEND • Dividend (excluding avoir fiscal tax credit):€1.49 /share, up 7.2% • Payout rate: 36%

  30. 2003 TARGETS Barring an abrupt deterioration of the environment • Turnover growth in excess of the market • Recurring profit on a par with 2002, provided there are no changes in tax rules and no new provisions to cover fall in stock markets • Share price at a premium to Embedded Value

  31. CNP Assurances on line:www.cnp.frBrigitte MOLKHOUInvestor relationsbrigitte.molkhou@cnp.fr+33 1 42 18 77 27CNP Assurances4, place Raoul dautry75716 Paris Cedex 15infofi@cnp.fr

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