Your Partner in Insurance

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(1)WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. Your Partner in Insurance.

(2) WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc.

(3) . Annual Report 2011 . Message of the Chairman and CEO of Ageas Report of the Board of Directors of Ageas Ageas Consolidated Financial Statements ageas SA/NV Company Financial Statements. Brussels | Utrecht 14 March 2012. 3. Annual Report 2011. . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. ageas N.V. Company Financial Statements.

(4) Annual Report 2011. 4. WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. .

(5) Contents AGEAS at a glance 2011 .................................................................................................................................................................................................7 Key events in 2011 .........................................................................................................................................................................................................10 Introduction .....................................................................................................................................................................................................................11. Message of the Chairman and CEO of Ageas .................................................................................................................................................. 13 Message to the shareholders .........................................................................................................................................................................................14. Report of the Board of Directors of Ageas ........................................................................................................................................................ 17 1 2. Developments and results ................................................................................................................................................................................18 Corporate Governance Statement....................................................................................................................................................................24. Ageas Consolidated Financial Statements 2011 .............................................................................................................................................. 45 Consolidated statement of financial position ..................................................................................................................................................................46 Consolidated income statement .....................................................................................................................................................................................47 Consolidated statement of comprehensive income .......................................................................................................................................................48 Consolidated statement of changes in equity.................................................................................................................................................................49 Consolidated cash flow statement ..................................................................................................................................................................................50. General Notes ................................................................................................................................................................................................... 51 Legal structure ..................................................................................................................................................................................................52 Summary of accounting policies .......................................................................................................................................................................53 Acquisitions and disposals ...............................................................................................................................................................................65 Shareholders’ equity .........................................................................................................................................................................................69 Non-controlling interests ...................................................................................................................................................................................74 Earnings per share ...........................................................................................................................................................................................75 Risk Management .............................................................................................................................................................................................76 Supervision and solvency ...............................................................................................................................................................................105 Post-employment benefits, other long-term employee benefits and termination benefits .............................................................................108 Employee share option and share purchase plans ........................................................................................................................................116 Remuneration of Board of Director members and Executive Committee members ......................................................................................118 Audit fees ........................................................................................................................................................................................................125 Related parties ...............................................................................................................................................................................................126 Information on segments ................................................................................................................................................................................128. Notes to the Consolidated statement of financial position .............................................................................................................................. 141 Cash and cash equivalents ............................................................................................................................................................................142 Financial investments .....................................................................................................................................................................................143 Investment property ........................................................................................................................................................................................149 Loans ..............................................................................................................................................................................................................150 Investments in associates ..............................................................................................................................................................................153 Reinsurance and other receivables ................................................................................................................................................................156 Call option BNP Paribas shares .....................................................................................................................................................................157 Accrued interest and other assets ..................................................................................................................................................................159 Property, plant and equipment .......................................................................................................................................................................160 Goodwill and other intangible assets ..............................................................................................................................................................162 Liabilities arising from Life insurance contracts ..............................................................................................................................................166 Liabilities arising from Life investment contracts ............................................................................................................................................167 Liabilities related to unit-linked contracts........................................................................................................................................................168 Liabilities arising from Non-life insurance contracts .......................................................................................................................................169 Debt certificates ..............................................................................................................................................................................................170. . 5. Annual Report 2011. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29. WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. 1 2 3 4 5 6 7 8 9 10 11 12 13 14.

(6) 30 31 32 33 34 35 36 37. Subordinated liabilities....................................................................................................................................................................................171 Borrowings ......................................................................................................................................................................................................173 Current and deferred tax assets and liabilities ...............................................................................................................................................174 RPN(I) .............................................................................................................................................................................................................176 Accrued interest and other liabilities ...............................................................................................................................................................178 Provisions .......................................................................................................................................................................................................179 Liability related to written put option on NCI ...................................................................................................................................................180 Fair value of financial assets and financial liabilities ......................................................................................................................................181. Notes to the Consolidated income statement ................................................................................................................................................. 185 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52. Insurance premiums .......................................................................................................................................................................................186 Interest, dividend and other investment income .............................................................................................................................................188 Result on sales and revaluations....................................................................................................................................................................189 Investment income related to unit-linked contracts ........................................................................................................................................190 Share of result of associates ..........................................................................................................................................................................190 Fee and commission income ..........................................................................................................................................................................191 Other income ..................................................................................................................................................................................................191 Insurance claims and benefits ........................................................................................................................................................................192 Finance costs .................................................................................................................................................................................................193 Change in impairments...................................................................................................................................................................................193 Impact MCS conversion and disputes Dutch State ........................................................................................................................................194 Fee and commission expenses ......................................................................................................................................................................195 Staff expenses ................................................................................................................................................................................................195 Other expenses ..............................................................................................................................................................................................196 Income tax expenses......................................................................................................................................................................................197. Notes to items not recorded on the Consolidated statement of financial position ......................................................................................... 199 53 54 55 56. Contingent liabilities........................................................................................................................................................................................200 Lease agreements ..........................................................................................................................................................................................205 Assets under management.............................................................................................................................................................................206 Events after the date of the statement of financial position ............................................................................................................................207. Statement of the Board of Directors ................................................................................................................................................................ 209 Independent auditor’s report ........................................................................................................................................................................... 210 ageas N.V. Company Financial Statements 2011 .......................................................................................................................................... 235 Other information ............................................................................................................................................................................................ 251. Annual Report 2011. Forward-looking statements to be treated with caution ................................................................................................................................................252 Availability of company documents for public inspection .............................................................................................................................................253 Dematerialisation and registration of bearer shares ....................................................................................................................................................254 Glossary and abbreviations ..........................................................................................................................................................................................255. 6. . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. ageas SA/NV Company Financial Statements 2011 ...................................................................................................................................... 213.

(7) Shareholders’ equity. Total Assets. € 7,760 million. € 90,602 million. Gross Inflow1). Net result attributable to shareholders. FUM. 17,219 million. € (578) million. € 70,600 million. Dividend per share. Net result Insurance. Net result General. € 0.08. € (313) million. € (265) million. Solvency ratio Insurance. Combined ratio. Employees. 207%. 101.1%. 12,557. at a glance. 1). 2011. Gross inflow includes the inflow of Ageas’s equity associates. Excluding the equity associates, as reported under IFRS, the inflow amounted to EUR 11,237 million.. 7. Annual Report 2011. . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. AGEAS.

(8) 2011. 2010 1). 2009 1). Variance from. Variance from. 2010 to 2011. 2009 to 2010. Income Statement Gross Inflow. 11,237.1. 12,184.2. 12,017.7. ( 7.8%). 1.4%. Total income. 12,004.8. 13,647.1. 16,749.0. ( 12.0%). ( 18.5%). Net result attributable to shareholders. ( 578.2 ). 223.1. 1,209.8. *. ( 81.6%). -. of which Insurance. ( 313.1 ). 391.3. 505.0. *. ( 22.5%). -. of which General (incl. Eliminations). ( 265.1 ). ( 168.2 ). 704.8. ( 36.6%). *. 6.3%. Statement of financial position Total assets. 90,602.2. 99,166.7. 93,324.0. ( 8.6%). Funds under management. 70,599.6. 78,131.7. 72,970.3. ( 9.6%). 7.1%. 7,760.3. 8,421.7. 8,646.0. ( 7.9%). ( 2.6%). Shareholders’ equity Non controlling interests Total equity. 607.4. 744.3. 700.5. ( 18.4%). 6.3%. 8,367.7. 9,166.0. 9,346.5. ( 8.7%). ( 1.9%). ( 81.7%). Share information (in EUR) Basic Earnings per share. ( 0.23 ). 0.09. 0.49. *. Dividend per share. 0.08. 0.08. 0.08. 0%. 0%. Share price at 31 December. 1.20. 1.74. 2.59. ( 31.0%). ( 32.8%). ( 7.2%). 2.5%. 18.7%. *. ( 86.7%). 101.1%. 107.3%. 103.8%. ( 5.7%). 3.4%. 0.51%. 0.53%. 0.59%. ( 3.3%). ( 10.7%). Solvency ratio Insurance. 207.0%. 232.0%. 233.9%. ( 10.8%). ( 0.8%). Solvency ratio Group. 236.9%. 281.9%. 316.9%. ( 15.9%). ( 11.1%). Employees. 12,557. 11,707. 10,613. 7.3%. 10.3%. Return on equity Other data Combined ratio Cost life ratio. 8. The comparative figures have been changed for comparison reasons (see note 36 Liability related to written put option on NCI).. . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. Annual Report 2011. 1).

(9) Ageas Shareprice compared to Euro Stoxx Insurance Index: 31 December 2008 = 100. 400. 350. 300. 250. 200. 150. 100. 50. 31/3/09. 30/6/09. 30/9/09. 31/12/09. Ageas. 31/3/10. 30/6/10. 30/9/10. 31/12/10. 31/3/11. 30/6/11. 30/9/11. 31/12/11. Euro Stoxx Insurance. 9. Annual Report 2011. . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. 0. 31/12/08.

(10) Key events in 2011 FEBRUARY  Announcement of acquisition of a stake in AKSigorta (Turkey). APRIL  The General Meeting of Shareholders approved the nomination of Ronny Brückner as non-executive director. JULY  Closing of acquisition of a stake in AKSigorta. 1). MAY  Launch of the Ageas Club. MARCH  Acquisition of Castle Cover (UK)  Presentation of solid 2010 results  Ageas celebrated the 10th anniversary of its presence in Malaysia. JUNE 1). AUGUST  Management changes announced 3)  Announcement of share buy-back programme. OCTOBER. NOVEMBER.  Agreement reached on the sale of the German Life activities  Ageas celebrated the 10th anniversary of its presence in China.  Ageas and Sabanci agree to increase their stake in AKSigorta  Impairment of all maturities of Greek bonds.  Ageas organised the first edition of the Ageas Partnership Days 2)  Ageas, BGL BNP Paribas and BNP Paribas agreed to merge Fortis Lux Vie and Cardif Lux Vie (Luxembourg)  Impairment Greek bonds maturing before 2020. SEPTEMBER  Purchase of the Fortis Tier-1 debt securities  Investor day about the Asian activities. DECEMBER  Merger of Fortis Lux Vie and Cardif Lux Vie completed. This new web-based free public platform is open to retail shareholders and investors. All registered members hence have a rapid access to public information about Ageas and are informed of events specifically organised towards them and focussing on topics and themes of wide and current interest, directly connected to Ageas's developments or to wider social trends.. 2). Gathering of representatives from all its associates and joint ventures in Ghent. Partnership is a major pillar of Ageas's global strategy and this two days' forum served to highlight and celebrate the Partnerships, to create networking opportunities, to contribute to the group-wide dynamics and to emphasise the importance of each and every component to the operational success of the Group.. 3). Ageas announced the appointment of Christophe Boizard as member of the Group Executive Committee and as Chief Financial Officer with effect from 5 September 2011. Bruno Colmant, Deputy CEO of Ageas and responsible for Finance and Legal, left the company. He will however assist Ageas as an independent academic advisor on financial and economic matters as well as on ongoing financial legacy issues for a period of 2 years starting on 1 October 2011. Kurt De Schepper, member of the Group Executive Committee, became. Annual Report 2011. responsible for Legal, next to his position as Chief Risk Officer. Patrick Depovere, CFO of Ageas and member of the Group Management Committee, has expressed his wish to gradually reduce his professional involvement in Ageas and to pursue a career outside of the Group. He will remain with the Group until 31 March 2012.. 10 . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. JANUARY.

(11) Introducction. All amounts in the tables of thiss Annual Reportt are denominateed in millions of euros, unless stated s otherwise.. 11. Annual Report 2011.  . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. The Ageas Annnual Report 2011 includes the Report R of the Boaard of Directors of Ageas, the Ageas A Consolidaated Financial Sttatements 2011, with comparativve figures for 20010, prepared in accordance witth International Financial F Reportting Standards (IFRS) as adopteed by the European Unioon, as well as thee Financial Stateements of ageass SA/NV, preparred in accordancce with the legall and regulatory requirements applicable in Belgium and the Financial Statem ments of ageas N.V., N prepared in accordance with w the legal andd regulatory requuirements applicable in thhe Netherlands..

(12) Annual Report 2011. WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. 12 .

(13) . Message of the Chairman and CEO of Ageas. 13. Annual Report 2011. . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. .

(14) Message to the shareholders Dear Shareholders,. Annual Report 2011. We took some important decisions this year with respect to our investment portfolio. As you know, we have continued to reduce our sovereign debt exposure in particular against Southern European economies, and in this context we impaired all of our outstanding Greek debt. At the same time, we registered impairments on our equity portfolio to reflect the continuing market decline. The past year also highlighted why it is important to be well capitalised, and why it is important to protect that capital base. Ageas scores well in this area. The existence of a strong capital and cash base combined with the undervaluation of our share were also the main drivers behind our decision to launch a share buy-back programme, which was completed in January 2012. Finally we have invested significant time and effort to ensure the smooth implementation of the upcoming regulations known as Solvency II.. 14 . As we look back at 2011, the value of our differentiated ‘partnership’ strategy is clear. We have forged new important relationships in fast growing markets allowing us to take advantage of opportunities. We have entered the Turkish Non-life insurance market through a long-term partnership with Sabanci and the acquisition of a stake in AKSigorta. In Asia, home to so many of our strongest partnerships and joint ventures, we celebrated a decade of value creation in China and Malaysia. And the UK has had an exceptional year in terms of scale change leading to a strong improvement of our result, driven among others by our relationship with Tesco. That growth was further fuelled by the acquisition of Kwik Fit Financial Services (second half of 2010) and Castle Cover (2011), providing additional distribution power to our insurance business in the UK. In June, we organised for the first time the Ageas Partnership Days which brought together in one place a large number of the top managers from our partners in Europe and Asia for a fruitful exchange of ideas and best practices. In an effort to create a larger community of stakeholders in Ageas, and to increase awareness of our businesses and business model, we hosted an Investor Day for institutional investors on our Asian franchise. For our retail shareholders, we created the Ageas Club which already has some 2,000 members who are benefiting from improved access to the company and its management. Asia continues to be an increasingly important contributor to the group’s performance in respect of inflows, but equally we have seen important advances elsewhere including positive momentum in Non-life across all regions. Significant progress has been made in restoring the profitability of Non-life in Belgium and the UK in particular with Motor being a major profit driver. Our group has focused on managing its way through the impact of the Euro zone crisis, while efforts to streamline the portfolio, in line with the Group’s strategic objectives, have continued successfully.. WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. We began the year knowing that the environment would continue to be tough, but few could have predicted just how tough. We were left with the remnants of the financial crisis, enormous economic instability and diminishing market confidence on a global scale. While the political debates have been playing out on our doorstep in Europe, the impact of these events has been felt in every corner of the world. It has been a difficult time to do business, but it has been equally demanding for our partners and our customers, many of whom are grappling with the challenge of low interest rates, unemployment and slow rates of growth. They have looked to us for support and we have responded well, adapting our product offering to clients’ needs and working closely with our partners to ensure each other’s success. We also recognise, particularly in these difficult times, the significance of having loyal and committed shareholders..

(15) In September, Bruno Colmant left the company and we welcomed Christophe Boizard as our new w CFO and mem mber of the Group Executive Com mmittee, next to Bart B De Smet (C CEO), and Kurt De D Schepper (CRO O). From a governance perspectivve, the Board toook the decision to t split the Audit and Risk R Committee into an Audit Coommittee and a separate Risk and a Capital Com mmittee, in anticipation of new regulatory requuirements. Ageas has also continued to deliver on o its commitment to improve communications and to t provide full transparency too the market, inccluding release of o a detailed repport from the Remuuneration Committee.. We taake this opportunity to thank ourr customers, ourr valued partners and our stafff around the woorld for their on-ggoing support c to Ageas. A At the same time, we aree grateful to and commitment you, our o shareholders, for your continnued interest annd confidence in our coompany despitee these challengiing times. As a sign s of our comm mitment to you we w intend to proppose the payment of a dividend of 8 eurocent e per shaare for 2011 at thhe Annual Geneeral Meetings. r also ourr solidity and ourr strong belief in the quality of This reflects our activities and their underlying proofitability. As we proceed in 2012, we will continue to do everything in our power to deliver valuee for all of our stakehollders.. Dear shareholdder, while we woould like to see the t economic criisis behind us, the reality is that turrbulence will conntinue for the foreseeable futture. This requirees that we manaage our existing business prudeently, remaining agile and alert to t whatever lies ahead. But ultim mately we also want w to deliver a strong sustainaable performance foor the long term. With this in minnd we will selectively look for further organic and inoorganic growth opportunities; o wee will look for constant improvement in the performaance of our life and Non-life busineesses; and we will w ensure that we w have the rightt resources in the right place. Ouur success is duue to the committment and collaboration of our employees across thee company. We are a tremendously proud p of the collaborative spirit emerging e within Ageas where we w see the internnational exchangge of experiencees adding real value to our partneership strategy. man (on the righht) Jozeff De Mey, Chairm Bart De D Smet, CEO (on ( the left). 155. Annual Report 2011.  . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. While legacy isssues remain a reality r for Ageass for the foreseeaable future, we havee made some goood progress this year. We will continue to forccefully defend thhe company andd the interests off the shareholders against a all outstaanding issues annd future legal proceedings..

(16) Annual Report 2011. WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. 16 .

(17) . Report of the Board of Directors of Ageas. 17. Annual Report 2011. . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. .

(18) Report of the Board of Directors of Ageas ageas SA/NV and ageas N.V. are the two parent companies of Ageas. They head Ageas, which in turn comprises a number of subsidiary companies and equity associates engaged in Insurance. This report of the Board of Directors includes the Corporate Governance Statement (included in part 2) in accordance with the Belgian and Dutch Corporate Governance Code (in accordance with respectively article 96 of the Belgian Companies Code and article 391.3 Title 9 Book 2 of the Dutch Civil Code).. Developments and results. 1.1. Developments. 2011 has been marked by a tough financial environment. Our results were severely impacted by impairment charges on Greek sovereign bonds, equities and on goodwill related to the Hong Kong activity. In Life, our inflows in Europe declined following the challenging market circumstances and increased competition. In Non-life, our UK activities reported impressive growth and our operational results showed good improvement, in particular the UK. Combined ratios improved across all segments, underscoring the importance of our strategic choice for a balanced portfolio of activities. Our capital position and shareholders’ equity per share showed resilience, despite the volatility in the market.. Annual Report 2011. In the course of 2011, and in line with its defined strategy, Ageas undertook further actions to streamline and strengthen its Insurance activities. In February, Continental Europe took an important step towards enlarging its Non-life activities by acquiring a stake of 31 percent in AKSigorta, the number four Non-life insurer in Turkey. At the end of March, Ageas acquired Castle Cover Limited, a UK based intermediary specialising in the over 50s insurance sector. In the course of June, Ageas announced that Ageas Insurance International and BGL BNP Paribas, each holding 50% of the shares of Fortis Luxembourg Vie, signed a transaction with Cardif Lux International to merge their activities. Ageas entered further into an agreement with Swiss Re to transfer the run-off business of Intreinco N.V., the former reinsurance captive of the Fortis Group. This transaction also encompassed a further simplification of the corporate structure and has been completed at the end of 2011. Finally, in early October Ageas announced an agreement on the sale of the German Life activities with Augur Capital. The transaction is expected to be closed early 2012.. 18 . Ageas announced in August the initiation of the share buy-back programme for a total amount of EUR 250 million, Ageas bought 175.2 million shares as at 31 December for a total amount of EUR 227.8 million and corresponding to 6.7% of the total amount of shares outstanding. On 25 January 2012, Ageas announced the completion of the share buy-back programme. It acquired in total 192,168,091 shares corresponding to 7.3% of the amount of shares outstanding. Ageas’s Board of Directors will propose to the shareholders at the next Shareholder’s meetings of 25 and 26 April 2012, the cancellation of these shares. Legacy issues are still a reality for Ageas. On 26 January 2012, Ageas and Fortis Bank reached an agreement on a partial settlement of the RPN(I) and an entire call of the Tier 1 Debt securities, issued by Fortis Bank and for 95% held by Ageas. This settlement and call were both subject to a successful cash tender by BNP Paribas of at least 50% on the CASHES financial instrument. On 31 January 2012, BNP Paribas and Ageas announced a successful tender reaching a percentage of 62.9. On 6 February 2012, BNP Paribas converted 7,553 of the tendered securities outstanding into 78,874,241 Ageas shares. Details on this and other legacy issues can be found in Note 35 Provisions, Note 53 Contingent liabilities and Note 56 Events after the date of the statement of financial position. From a governance perspective, the Board of Directors was extended, after approval of the Shareholders’ meetings of April 2011, by Ronny Brückner as a new Board Member.. WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. 1.

(19) Results and solvency. Ageas reported a net result of EUR 578 million negative consisting of net losses of EUR 313 million for the Insurance operations and EUR 265 million for the General Account. Insurance overall The Insurance net result breaks down into a net result in Belgium of EUR 327 million negative, a net loss of EUR 8 million and EUR 64 million in Continental Europe and Asia respectively, partly offset by a net profit in the United Kingdom of EUR 86 million. The net result includes a net impairment charge on the investment portfolio of EUR 809 million of which EUR 627 million related to impairments on the Greek sovereign exposure and EUR 182 million on equities. Furthermore, Ageas decided to impair part of the goodwill related to AICA (Hong Kong) for an amount of EUR 99 million due to the low interest rate environment.. The Non-life operations improved substantially compared to last year and reported a positive net result of EUR 82 million compared to EUR 2 million last year. In 2011, the UK operations returned to profit (EUR 61 million) and Continental Europe and Asia contributed EUR 10 million and EUR 8 million respectively. The Non-life result in Belgium came down to EUR 3 million hampered though by impairment charges related to Greek sovereign bonds and adverse weather related costs. These weather related costs amounted to EUR 37 million. The net result of the Other Insurance segment, which includes the UK retail distribution operations, significantly improved to EUR 30 million, compared to EUR 12 million in 2010, benefiting from the contribution and the synergies of the recently acquired activities, Kwik Fit Financial Services and Castle Cover, and including result related to the fees from partners.. Continued actions to recalibrate the investments in fixed income and equities combined with some sales activity in real estate in Belgium, resulted in realised net capital gains of EUR 167 million, of which EUR 144 million in Belgium. Part of the gains realised in Asia (EUR 23 million) related to the sale of Ageas’s stake in Taiping Pension (EUR 20 million of which EUR 13 million in Asia Insurance and EUR 7 million accounted in the General Account).. General Account The General Account result of EUR 265 million negative was mainly driven by the change in valuation of the legacy issues. Aside from the legacy items, RPN(I), Royal Park Investments, the BNP call option and the Fortis Tier 1 Debt Securities, which had a combined negative impact of EUR 271 million, the General Account result also included a positive impact of EUR 56 million related to a settlement of outstanding tax issues reducing the total negative impact of the legacy items to EUR 215 million.. Life, Non-life and Other Insurance The overall Insurance net result can be split in a Life net result of EUR 425 million negative, a Non-life net result of EUR 82 million positive and a positive net result of Other Insurance of EUR 30 million.. At the end of 2011, the fair value of the RPN(I) liability came down to EUR 190 million (EUR 465 million, end 2010). The positive impact of EUR 275 million is mainly explained by the drop of the market value of the CASHES financial instrument from 50.2% to 35.4%.. The Life net result amounted to EUR 425 million negative compared to EUR 377 million positive in 2010. The non-recurring impairment charges on the investment portfolio and the goodwill related to AICA affected the performance. In addition, the result in Belgium included a charge amounting to EUR 20 million related to the contribution levied by the Belgian state on the insurance industry. In the UK, the Life result includes a charge of EUR 4 million related to an accelerated amortisation of deferred acquisition costs, due to higher than expected cancellations.. Compared to end 2010, the value of the BNP Paribas option declined by EUR 214 million, mainly because of a decrease in the BNP Paribas’ share price from EUR 47.69 to EUR 30.35 and the lower time value. This negative variance was partly mitigated by a substantially higher volatility assumption, going up from 33% to 49%.. 19. Annual Report 2011. . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. 1.2.

(20) The Fortis Bank Tier 1 Debt Securities, acquired at EUR 953 million at the end of September 2011 were booked at EUR 794 million at year-end. This resulted in a net unrealised loss in 2011 of EUR 159 million, including the amortisation of EUR 32 million in 2011. The net result also includes the positive impact of a first coupon payment of EUR 10 million, and a deferred tax impact of EUR 28 million, resulting in a total negative impact on the 2011 result of EUR 121 million. The net result of the General Account includes a positive result of EUR 30 million on the merger of Fortis Lux Vie with Cardif Lux International as well as the negative result of EUR 14 million on the sale of the German life activities. Solvency Ageas decided in 2011 to report the solvency calculation based on the regulatory view. As at 31 December 2011, total available regulatory capital under IFRS amounted to EUR 8.6 billion compared to EUR 9.2 billion at the end of 2010. The solvency excess amounts to EUR 4.9 billion, corresponding to a Group Solvency ratio of 237% vs. 282% end 2010.. Liability with respect to the put option related to the 25%+1 share of AG Insurance Belgium, held by Fortis Bank In the Consolidated Financial Statements of 2008, Ageas disclosed that on 12 March 2009 an agreement was signed on the sale of 25% + 1 share of AG Insurance Belgium to Fortis Bank for an amount of EUR 1,375 million. As part of this transaction Ageas granted to Fortis Bank a put option to resell the acquired stake in AG Insurance Belgium in the six-month period starting 1 January 2018 to Ageas. The exact terms and conditions related to the exercise of the put option have been subject to a review. As a result Ageas has recognised a financial liability against the present value of the estimated exercise price in 2018 of the put option. The figures for 2010 have been restated for comparison reasons. Based on these parameters the net present value of the liability as at 31 December 2011 is EUR 656 million. The impact on shareholders’ equity is limited to EUR 139 million positive in total, broken down in a positive impact of EUR 175 million in 2010 partially mitigated by a EUR 36 million negative impact in 2011. An explanation on respectively the Statement of financial position and income statement of ageas SA/NV and ageas N.V. can be found on the pages 230 until 231 respectively 237 until 242. Continuity statement ageas SA/NV in accordance with Belgian law The company has reported a loss carried forward of EUR 1,183,132,659. The Board of Directors is of the opinion that, despite the loss, the company possesses sufficient resources and capital with a shareholders’ equity of EUR 3.6 billion to continue its activities. 1.3. Annual Report 2011. Total available capital of the Insurance activities amounted to EUR 7.5 billion, with minimum solvency requirements amounting to EUR 3.6 billion. Compared to the end of December 2010, the Insurance solvency ratio went down from 232% to 207%. The decrease reflects the lower amount of available capital following the negative Insurance result including impairments and higher minimum solvency requirements, following the growth in Non-life across all segments and higher Funds under Management in Life Belgium. The solvency ratios in the business segments came down in all segments but remained solid at 174% in Belgium, 234% in the UK, 172% in Continental Europe and 292% in Asia. The Group available regulatory capital includes an amount of EUR 1.1 billion related to the General Account.. 20 . Amendments to the Articles of Association of ageas SA/NV and ageas N.V.. Please refer to the Corporate Governance Statement on page 26 for detailed information about the amendments of the Articles of Association of ageas SA/NV and ageas N.V. in 2011.. WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. The net result of Royal Park Investments at 100% amounted to EUR 441 million negative (Ageas’s share at EUR 197 million negative), consisting of EUR 144 million net profit and an impairment on goodwill of EUR 586 million. At year end, the hedge reserve including the realised gains on sold swaps amounted to EUR 190 million post tax, up EUR 96 million on last year (Ageas’s share at EUR 43 million). As a result of both elements, Ageas’s equity investment in RPI decreased by EUR 154 million from EUR 933 million end 2010 to EUR 779 million end 2011..

(21) Certain transactions and other contractual relationships. There are no transactions or other contractual relationships to be reported between ageas SA/NV and its Board members that gave rise to conflicting interests as defined in the Belgian Companies code. 1.5. Events after the date of the Consolidated statement of financial position. There have been no material events since the date of the Consolidated statement of financial position that would require adjustment in Ageas Consolidated Financial Statements as at 31 December 2011. Share buy-back Ageas has completed the share buy-back programme announced on 24 August 2011. Between 24 August 2011 and 25 January 2012, Ageas has bought back 192,168,091 shares corresponding to 7.3% of the total shares outstanding and totalling EUR 250 million. At year end 2011 the buy-back stood at 175,163,656 shares, corresponding to EUR 228 million. Together with the shares previously held by Ageas, the total amount of shares now owned by Ageas amounts to 8.9%. Ageas currently holds the shares as treasury shares. Ageas’s Board has decided to propose to the shareholders at the next shareholders meetings (in Brussels on 25 April 2012 and in Utrecht on 26 April 2012) the cancellation of these bought back shares. At the same shareholders meetings, the Board will ask, as usual, for the renewed authorisation from the shareholders to purchase up to 10% of its remaining outstanding shares. Settlement with Fortis Bank and BNP Paribas On 26 January 2012, Ageas and Fortis Bank reached an agreement on a partial settlement of the RPN(I) and the full call of the Tier 1 instrument, issued by Fortis Bank and for 95% held by Ageas. The settlement and call were both subject to the successful cash tender by BNP Paribas on the CASHES financial instrument. On 6 February 2012, BNP Paribas converted 7,553 of the tendered securities out of 12,000 CASHES securities outstanding (62.94%) into 78,874,241 Ageas’s shares. BNP Paribas committed not to sell these shares for a period of six months. The total number of outstanding Ageas shares remains unchanged. However, the number of shares entitled to dividend and voting rights increased by 3.5%.. The indemnity for a 100% conversion was set at EUR 456 million, so Ageas will indemnify BNP Paribas for EUR 287 million as a result of the above conversion. Following the conversion, the RPN(I) liability ceases to exist on a pro rata basis. In case BNP Paribas exchanges additional CASHES within a period of 2 years, it will be indemnified within the limits specified in the agreement reached on 26 January 2012. Ageas will also pay Fortis Bank an annual indemnification for the 46,439,042 non-converted shares underlying remaining CASHES outstanding. The settlement impacts on Ageas as follows: Positive impact on the Net Cash position of EUR 666 million  Ageas will receive EUR 953 million for the redemption of the Tier 1 instrument.  Ageas will pay an indemnity of EUR 287 million.  Net proceeds, to be received on 26 March 2012, will amount to EUR 666 million. Negative result impact in the first quarter 2012 of EUR 147 million  A positive impact due to the redemption of the Tier 1 instrument amounting to EUR 131 million. This relates to EUR 159 million higher value of the instrument compared to its amortised cost value end 2011 and EUR 28 million cancellation of the corresponding deferred tax asset;  A positive net impact related to the pro rata release of the RPN(I) liability amounting to EUR 21 million. Ageas reviewed the level 3 valuation of the RPN(I) and decided to include EUR 169 million floor in the valuation of the remaining RPN(I), corresponding to 37.06% of the indemnification paid. At year end, the RPN(I) liability amounted to EUR 190 million and as a result the release amounted to EUR 21 million;  A negative impact of EUR 299 million due to indemnifications. This amount breaks down into the EUR 287 million indemnification paid and EUR 12 million net loss due to costs related to the transaction and including the best estimate of the fair value of the annual indemnification, based on the assumption that the remaining Cashes will be converted in the next years. After conversion, the related shares will be dividend entitled which could lead to a potential maximum dilution of 1.3%.. 21. Annual Report 2011. . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. 1.4.

(22) Lower credit risk to Fortis Bank of EUR 2.8 billion As a result of the EUR 953 million redemption of the Tier 1 and the conversion of EUR 1.8 billion nominal amount of CASHES securities outstanding, the credit risk to Fortis Bank will be lowered by more than EUR 2.8 billion. Impact on Solvency The net results stated above will influence the equity of the General Account and Group solvency. The available solvency will decrease with approximately 2%. The solvency of the operating insurance companies is not affected.. 1.8. The Board of Directors of Ageas consists of 11 members, for more details about the composition of and changes to the composition in the course of 2011; please refer to 2.7 Board of Directors. The Remuneration Committee consists of 3 members, for more details about the composition of and changes to the composition in the course of 2011; please refer to 2.7 Board of Directors. The Audit Committee consists of 3 members, for more details about the composition of and changes to the composition in the course of 2011; please refer to 2.7 Board of Directors. Besides these two legally required committees Ageas has created a Corporate Governance Committee and a Risk and Capital Committee. 1.9. Bail out of Greece On 21 February 2012, an agreement was announced by the Euro zone Finance ministers related to the second bail out of Greece. Ageas has concluded that considering the currently available information and taking into account the exposure of Ageas on Greece at year-end 2011, it is not expected that the agreement will have a significant impact on the statement of financial position of Ageas. 1.6. Dividend. Ageas’s Board has decided to propose for approval by the shareholders a gross cash dividend of 8 eurocent per share for 2011. This dividend proposal reflects our strong belief in the strength of the company and in the underlying profitability of our business. 1.7. Outstanding shares at the end of 2011. Annual Report 2011. The number of issued Ageas shares is 2,623,380,817 at year-end 2011. This number includes 125,313,283 shares related to CASHES and 39,682,540 shares related to the FRESH which do not bear dividend nor voting rights as long as they are pledged as collateral for these instruments. For more detailed information on the outstanding shares of Ageas, the dividend rights and the capital structure, please refer to Note 4 Shareholders equity.. 22 . Ageas Board of Directors, Remuneration Committee and Audit Committee. 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 2011 has been prepared in accordance with the statutory rules implementing the EU Takeover Directive that came into force in the Netherlands on 31 December 2006 and in Belgium on 1 January 2008. The Board hereby gives the following explanations concerning the respective elements to be addressed under these rules:  a comprehensive overview of the prevailing capital structure can be found in Notes 4 Shareholders’ equity and 30 Subordinated liabilities of the Ageas Consolidated Financial Statements 2011;  restrictions on the transfer of shares extend only to preference shares (if issued) and the securities described in Note 30 Subordinated liabilities of the Ageas Consolidated Financial Statements 2011;  Ageas lists under the heading ‘Specifications of equity and structure of the shareholder group’ 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 the Netherlands and by the Articles of Association of ageas SA/NV;. WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. Decreased volatility in the results As long as the model for valuing the RPN(I) generates a liability that is lower than the EUR 169 million floor, the value of the RPN(I) will remain at this floor level; otherwise the value generated by our model for the valuation of the RPN(I) will be applied. The quarterly payments to BNP Paribas and the Belgian State will also be lowered in proportion..

(23)  Ageas shareholders are under an obligation to meet certain notification requirements when their participation exceeds or drops below certain thresholds, as prescribed by Belgian and Dutch law and by the Articles of Association of ageas SA/NV. For ageas SA/NV, shareholders are to notify the Company as well as the FSMA when their participation exceeds or drops below the thresholds of 3% or 5% of the voting rights or any multiple of 5%. For ageas N.V., shareholders at least have to notify the Dutch Authority for the Financial Markets (which will inform the Company) when their participation (shares or voting rights) exceeds or drops below one of the following thresholds: 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% and 95%. Ageas publishes such information on its website. 1.10. Strategy. Ageas offers a broad range of life and Non-life products, distributed through multiple channels to consumers and SME’s. It is active in eleven countries in Europe and Asia. Ageas has increased its focus on risk business (Life and Non-life) and fee business in mature markets in Europe, to lower its dependency on investment income. Ageas’s presence in mature and emerging markets in Europe and Asia creates a balance of growing and cash generating businesses and mitigates countryspecific risks. Ageas constantly invests in its businesses both organically and through add on acquisitions. Where it sees the right opportunities, Ageas acquires new businesses in attractive markets with longterm growth potential, which meet certain strategic and financial criteria:  Critical size: ability to compete effectively in a market, and reach a top-5 position in the medium term.  Meaningful contribution: business should be able to make a meaningful contribution to the insurance earnings of Ageas.  Return in excess of cost of capital taking into account value creation and specific risks.  Ability to pay dividends over time.. 23. Annual Report 2011. . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc.  no special rights are attached to issued shares other than those mentioned in Note 4 Shareholders’ equity and Note 30 Subordinated liabilities of the Ageas Consolidated Financial Statements 2011;  share option and share purchase plans, if any, are outlined in Note 10 Employee share option and share purchase plans of the Ageas Consolidated Financial Statements 2011. The Board of Directors decides on the issuance of shares and options, as applicable, subject to local legal constraints;  except for the information provided in Note 4 Shareholders’ equity, Note 13 Related parties and Note 30 Subordinated liabilities of the Ageas Consolidated Financial Statements 2011, Ageas is unaware of any agreement among 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 Meetings of both ageas SA/NV and ageas N.V. Any amendment to the Articles of Association requires the General Shareholders’ Meetings 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 regardless of the quorum. For amendments to the Articles of Association related to the twinned share principle, the General Shareholders’ Meetings of both ageas SA/NV and ageas N.V. must comply with the quorum and majority requirements laid down in those articles;  the Ageas Board is entitled both to issue and to buy back shares, in accordance with authorisations granted by the General Shareholders’ Meetings of ageas SA/NV and ageas N.V. The present authorisations will expire on 27 October 2013 for ageas SA/NV and on 28 October 2013 for ageas N.V.;  neither ageas SA/NV nor ageas N.V. is a 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;  neither ageas SA/NV nor ageas N.V. has entered into an 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;.

(24) The group has a proven competence in developing partnerships wherever it operates and as such, partnerships sit at the heart of Ageas’s strategy. Often, Ageas’s operating companies are joint ventures with distribution partners. Ageas prefers majority ownership except where regulation, strategic or market circumstances prevent this. Ageas invests in the development and exchange of knowledge and expertise within the group on a continuous basis. Ageas maintains competence hubs at the corporate, regional and business level allowing it to leverage knowledge and capabilities for the benefit of both Ageas and its partners. Ageas understands the importance of maintaining a strong statement of financial position. Ageas adopts a conservative approach to risk underpinned by a sound risk management process. The group constantly re-assesses its portfolio to ensure that each of its activities meet strict criteria. Ageas aims to obtain a return on equity in insurance in excess of 11%. The company has a policy of paying out 40% - 50% of the consolidated Insurance net profit as dividends. Ageas continues to look proactively for solutions for the legacy issues that stem from Ageas’s predecessor Fortis.. Annual Report 2011. Most legal proceedings are still at the early stages and therefore timing and (financial) outcome remains hard to estimate.. 24 . 1.11. Outlook. Ageas has a strong belief in the strength of the company and in the underlying profitability of its business. However, given the uncertainties in the financial markets and the insurance environment we are not able to provide an outlook of the 2012 results.. 2. Corporate Governance Statement. In 2011, Ageas continued to build on its future as an international insurance group, attaching great importance to effective governance and transparent disclosure to the public and other stakeholders. Ageas not only anticipated the entering into force of the new law of 20 December 2010 (as amended) on the exercise of certain rights of shareholders in listed companies, implementing the Directive 2007/36EC, by early adapting the bylaws of Ageas with the new legislation. Ageas also anticipated the entering into force of the law of 6 April 2010 reinforcing corporate governance in listed companies and autonomous state enterprises by submitting the Remuneration Policy for the members of the Group Executive Committee for approval to the Ordinary Shareholders meetings in Belgium and the Netherlands. Furthermore, at the Annual Shareholders meetings Ageas presented the Ageas Shareholders’ Club, allowing retail shareholders and investors fast and efficient access to public information about Ageas. Ageas has also revisited its Corporate Governance Charter to further align with applicable rules and regulation or even to anticipate on (international) trends that Ageas considers useful. The Corporate Governance Charter is available on Ageas’s website: http://www.ageas.com/en/Documents/Corp_Govern_Charter_EN.p df. Ageas will continue its efforts to adhere to the applicable codes.. WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. Ageas uses different, and often multiple, distribution channels depending on the market in which it operates. Multiple channels enable customers to access Ageas’s products. At the same time these channels allow Ageas to access its customers to better understand their needs and increase their awareness of Ageas’s products..

(25) Ageas’s legal structure and shares. Ageas, the former Fortis, was created in 1990 by the cross-border merger – Europe’s first – of Belgian insurer AG Group with Dutch bancassurance group AMEV/VSB. Our overall legal structure has been adapted regularly in the intervening years. Ageas has two parent companies (a Belgian one, ageas SA/NV, and a Dutch one, ageas N.V.) and shares which have been twinned to form one Ageas share. Ageas shares are ordinary shares in every respect, including voting rights and dividend entitlement. In April 2010, the name of Fortis changed into Ageas. Each Ageas share carries a single vote at the shareholders’ meetings of ageas SA/NV and ageas N.V. Ageas shareholders are thus entitled to attend and cast their votes at the general meetings of both companies. The two shareholders’ meetings basically deal with the same matters. The Articles of Association specify that for certain resolutions to be valid, they must be passed by both meetings.. In 2011, Ageas acquired Castle Cover Limited and a 33.11 percent stake in AKSigorta and merged Fortis Lux Vie with Cardif Lux International (see Note 3 Acquisitions and disposals). Ageas currently comprises of:  a 75% stake in AG Insurance;  insurance activities in: - the UK, - Continental Europe, and - Asia;  a 44.7% stake in Royal Park Investments – a holding entity of a portfolio of structured credits;  financial assets and liabilities linked to various financing instruments. Ageas has further simplified its legal structure and streamlined its operational activities, by respectively liquidating two Luxembourg companies, FGF Lux S.A. and Ageasinvestlux S.A., and divesting its German insurance activities to Augur (the sale will be concluded in early 2012), its portfolio of run-off reinsurance activities to Swiss Re and by restructuring its life insurance activities in Luxembourg. In 2012, Ageas will continue to investigate further material simplification of its corporate structure taking into account the interest of all stakeholders.. ageas SA/NV. 50%. ageas N.V.. 50%. Ageas Insurance International N.V.. 100% Various Legal entities part of Ageas Asia. Ageas UK Ltd.. 44.7%. 50% AP. 75%. 50%. 100%. Various Legal entities part of Continental Europe. 100%. entities into Ageas is completed early 2011. The nameFinance change of Royal *ParkThe rebranding of the legal Ageas Ageasfinlux Ageas Hybrid. InvestmentsAgeas Reinsurance N.V. Financing into Intreinco N.V. took pleaseSA early March 2011. ssss SA ssss SA/NV. N.V.. AG Insurance SA/NV. 100% Ageas B.V.. 100% Intreinco N.V.. 25. Annual Report 2011. . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. 2.1.

(26) 2.2. Amendments to the Articles of Association of ageas SA/NV and ageas N.V.. In April 2011, the shareholders meeting approved, next to merely textual, non-material amendments, the following amendments to the Articles of Association of ageas SA/NV and ageas N.V.:  authorisation to issue shares under the authorised capital to meet the contractual obligations under certain financial hybrid instruments to settle in shares for any coupon amounts due;  the obligation to submit the remuneration report for approval to the shareholders;  the right for (a) shareholder(s) representing at least 1% of the capital or owning Ageas units whose stock exchange value amounts to at least EUR 50 million to bring an additional point on the agenda of the shareholders meeting;  the implementation of the record date. With these modifications, Ageas anticipated on the entering into force of the law of 6 April 2010 reinforcing corporate governance in listed companies and autonomous state enterprises.. Annual Report 2011. For more detailed information about the procedure applicable for the modification of the bylaws of ageas SA/NV and ageas N.V., please refer to our website: http://www.ageas.com/en/Pages/articles_of_association.aspx.. 26 . 2.3. Board of Directors. The Board of Directors operates within the framework defined by Belgian and Dutch legislation, normal governance practice in the two countries and the Articles of Association. The role and responsibilities of the Board of Directors and its composition, structure and organisation are described in detail in the Ageas Corporate Governance Charter. 2.3.1 Composition On 27 and 28 April 2011, shareholders of respectively ageas SA/NV and ageas N.V. approved the appointment of Ronny Brückner as non-executive director until the end of the Annual General Meeting of Shareholders in 2014. The newly appointed director followed the induction programme prepared by Ageas. The shareholders also approved the reappointment of Jozef De Mey, Guy de Selliers de Moranville, Frank Arts, Shaoliang Jin, Roel Nieuwdorp, Lionel Perl and Jan Zegering Hadders as member of the Board of Directors. The Board of Directors currently consists of eleven members, namely: Jozef De Mey (chairman), Bart De Smet (CEO), Guy de Selliers de Moranville (vice-chairman), Belén Romana, Ronny Brückner, Bridget McIntyre, Frank Arts, Lionel Perl, Jan Zegering Hadders, Roel Nieuwdorp and Shaoliang Jin. The majority of the Board of Directors are non-executive directors and are independent in accordance with the best practice provision III.2.2 of the Dutch Corporate Governance Code. On 14 September 2011, a law was published in the Belgian official gazette requiring from listed companies that at least 1/3rd of the members of their Board should be women. This quota should be achieved by 2017. Today, already two out of the eleven Board members are female. Ageas supports this trend to have a higher participation level of women at Board level. The Chairman of the Board of Directors is actively supporting Women on Board, as mentor of one of the participants. This initiative promotes the participation of women in the Board of Directors of listed companies. The Board of Directors will consider the obligations imposed by this law when new Board members have to be proposed for appointment or the mandates of the existing Board members are submitted for renewal without reducing the standards of expertise and skills set by Ageas for Board members.. WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. The total number of issued shares remained unchanged in 2011, 2,623,380,817 shares. There are neither different share classes nor any preferential shares issued. Additional information on Ageas’s shares is set out in the Ageas Corporate Governance Charter and in Note 4 Shareholders’ equity and in Note 56 Events after the date of the statement of financial position. Ageas has an outstanding subordinated liability (‘FRESH’) exchangeable into Ageas shares. Additional information on Ageas’s subordinated liabilities is set out in Note 30 Subordinated liabilities..

(27) In 2011, the Board meetings dealt with the following matters, among others:  preparation of the General Meetings of Shareholders;  the strategy pursued by Ageas as a whole and by each business;  ongoing development of each of the Ageas businesses;  quarterly, half yearly and yearly financial statements;  the Annual Report 2010;  press releases;  the 2012 budget;  the solvency of the company;  the asset management and the investment policy of the company;  the risk policy framework of Ageas;  investor relations and corporate communication;  reports of Board Committees following each of their meetings;  Ageas’s organisational and legal structure;  nomination and renewal of directors for appointment by the General Meetings of Shareholders;  the succession planning of the Board of Directors;  actualisation of the Corporate Governance Charter of Ageas in general and the Board Committees in particular;  the governance and the performance of the Group Executive Committee and Group Management Committee;  the Remuneration Policy in general and the remuneration of the CEO and Executive Committee members in particular;  follow-up of legal proceedings and legacy issues;  various acquisition files. The CEO reported in the Board of Directors meetings on the development of the results and the general performance of the different businesses.. In addition, the Board, under the leadership of the Chairman and with the assistance of a third party, conducted a self-assessment. This self-assessment was organised through a web-based application followed by bilateral discussions between the Chairman and each Board member and a briefing in the Board of Directors on the outcome of this exercise. The self-assessment focussed on Board effectiveness on items such as complementarities, background of the Directors, the individual and group performance of the Board, the structure and the responsibilities of the Board Committees as well as the interaction between the Board members mutually, with the Chairman of the Board and with Executive Management. The web-based application included the assessment of the Chairman of the Board of Directors and the Executive Board member. There are no transactions to report in which there is a conflict of interest with Board members as required under Dutch and Belgian company law. There are two related party transactions to report in accordance with best practice provision III.6.4 of the Dutch Corporate Governance Code (see Note 13 Related parties). As a result of the related party transaction, Ronny Brückner has lost his capacity as independent member of the Board of Directors. The concept of Corporate Social Responsibility (CSR) is not new for Ageas and is in many ways adopted across the company. A project is started to bring all local initiatives together within a group wide view. This view will take into account the specific characteristics and objectives of the local entities but strives to develop a common view on CSR for Ageas. In line with its organisational model there is a very strong local empowerment with respect to social commitments allowing Ageas to benefit from the various CSR initiatives taken currently within the businesses, in line with their choices, specific priorities and own strategic views.. 27. Annual Report 2011. . WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. 2.3.2 Meetings The Board of Directors met on 11 occasions in 2011. In principle, the Board of Directors has eight scheduled meetings a year. Attendance details can be found in 2.7 Board of Directors..

(28) Please refer to Note 11 Remuneration of Board of Director members and Executive Committee members for detailed information on the remuneration of non-executive directors and the members of the Executive Committee in 2011. In accordance with Dutch and Belgian law and regulations, details and updates of stock options and shares held by each member of the Board of Directors are reported to the FSMA in Belgium and the Authority for the Financial Markets in the Netherlands. On 31 December 2011, members of the Board of Directors held a total of 31,211,826 shares and 103,384 options. 2.3.4 Board Committees In the course of 2011, the Board of Directors has revisited the Board Committees, including their composition and terms of reference. Ageas anticipates on a trend to separate the Audit and Risk committee into two separate Board Committees. The Board of Directors therefore decided to transfer the responsibilities from the Audit and Risk Committee related to risk to a newly created Risk and Capital Committee. Not only risk and the matters related to the capital position of the Group are discussed in this Board Committee but also the competences related to the financial aspects of the legacies of the former Fortis are transferred from the Financial Task Force to this new committee. The Corporate Governance Committee has taken over the competences of the Legal Task Force. As a result of which both temporary task forces created in 2009 to deal with the legacy issues of the old Fortis, are dissolved. The terms of reference of each Board Committee are described in the Ageas Corporate Governance Charter.. Annual Report 2011. In line with the Ageas Governance Charter, each Board Committee is composed of non-executive directors and has a minimum of three and a maximum of five members.. 28 . Attendance details of the Board Committees can be found in 2.7 Board of Directors. 2.3.5 The Corporate Governance Committee (CGC) The role and responsibilities of the CGC are described in detail in the Ageas Corporate Governance Charter. The CGC comprised the following members in 2011: Jozef De Mey (Chairman), Guy de Selliers de Moranville, Roel Nieuwdorp and Jan Zegering Hadders. The CEO attended the meetings, other than during discussion of issues relating to his own situation. The CGC met on nine occasions in 2011. Attendance details can be found in 2.7 Board of Directors. The following matters were dealt with:  organisational structure of the Group;  the Corporate Governance Charter in general and composition and terms of reference of the Board Committees in particular;  the renewal of the mandates of the members of the Board of Directors and the succession planning, of the Board of Directors including the representation of women in the Board of Directors;  the review of the nomination of an additional Board member;  succession planning of the Executive Management;  appointment of the CFO;  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;  disclosures regarding governance and the activities of the CGC in the Ageas Consolidated Financial Statements;  legal issues related to the legacy of the former Fortis;  the review of potential conflicts of interest of Board members and Executive Management. The Chairman of the CGC reported on these topics to the Board of Directors after each meeting and submitted the Committee’s recommendations to the Board for final decision-making.. WorldReginfo - 7dc31130-66f7-42b8-82c3-769f4e7afadc. 2.3.3 Remuneration The remuneration of non-executive directors consists of a basic annual remuneration plus attendance fees for Board and Board Committee meetings. Non-executive directors can also receive remuneration in the Ageas subsidiaries in which they hold a Board position. Non-executive directors do not receive any variable or profit-related incentives, option rights, shares or other fees..