Foto gebouw

1. 4 Life business, embedded value and analysis of changeJohan DaemenGeneral Manager, Life insurance Foto gebouw

2. Agenda • Life insurance activity & scope • Terminology • ANAV (“Adjusted Net Asset Value”) • Components • Roll forward 2002-2003 • VBI (“Value of Business In Force”) • Components • Assumptions • Sensitivities • Roll forward 2002-2003 • VNB at date of sale (“Value of New Business”)

3. Life business, overview 3 000 000 2 500 000 767 402 2 000 000 970 662 1 500 000 1 458 562 1 229 163 170 758 1 000 000 1 780 155 934 502 1 259 859 500 000 926 707 437 679 407 478 408 475 1998 1999 2000 2001 2002 2003 Non Linked Unit Linked Growth in Total Life Premium Income 1998-2003 (‘000 EUR) 2 547 557 232% 2 230 521 203% 1 867 037 170% 1 666 842 152% 1 341 980 122% 1 079 465 100% Minor changes to published figures in order to improve model accuracy

4. Life business, overview 12 000 000 10 000 000 3 263 311 8 000 000 2 952 108 2 952 108 6 000 000 2 285 968 1 195 446 210 779 4 000 000 7 351 642 5 745 188 4 637 766 4 497 804 4 467 156 4 162 741 2 000 000 1998 1999 2000 2001 2002 2003 Non Linked Unit Linked Growth in Technical Provisions Life 1998-2003 (‘000 EUR) 10 614 953243% 8 697 296199% 7 589 874174% 6 783 772155% 5 662 602129% 4 373 520100% Minor changes to published figures in order to improve model accuracy

5. Scope • Subsidiaries under review : KBC Insurance Belgium + Fidea + Vitis Life total technical provisions: 9 987 948 Modelled: • 88 % of the mathematical reserves • 94.7 % of the total premium income in 2003 • 99.8 % of the new premium income in 2003 • Subsidiaries not under review : Central European Subsidiaries + Secura (CSOB, K&H Life, Warta Vita, Ergo) total technical provisions : 627 0052

6. Terminology KBC standard “Embedded Value” Embedded Value Embedded Value As investment for VBI**(PVFP- CostTied Surplus) PVFP* Value In Force ANAV ANAV TiedSurplusLife TiedSurplusLife PV TiedSurplus Life Shareholders Equity or Other Allocated Surplus Other Allocated Surplus Other Allocated Surplus = Economic Adjustments FreeSurplus FreeSurplus FreeSurplus > Equity adjustments> Asset adjustments> Resilience Reserves> Tax assets and liab. Other Allocated Surplus = Tied Surplus Non Life + Other Tied Surplus *PVFP = Present Value of Future Profit **VBI = Value of Business In Force

7. Embedded Value : total figures (‘000 EUR) * Some methodological changes took place in the calculation of the tied surplus life

8. Adjusted Net Asset Value (ANAV): composition “Adjusted Net Asset Value” (ANAV) = [+]Shareholders Equity [+]Equity Adjustments • “Provision for financial risks” [+]/[-]Asset Adjustments • Unrealised capital gains on the investments, except for the bond investments in the life portfolio (“buy-and-hold”-philosophy) • Goodwill is deducted [+]Additional Reserves • Catastrophe and equalisation reserves • Additional reserves life [-]Tax assets and liabilities on the above

9. Adjusted Net Asset Value (ANAV): as at 31/12/2003 ('000 EUR) 2 500 000 +227 048 2 000 000 +103 105 +127 832 -152 379 1 500 000 -247 912 1 000 000 1 762 606 1 704 912 500 000 0 shareholders equity asset additional additional tax assets ANAV equity adjustments adjustments reserves reserves life and liab. Non life

10. Adjusted Net Asset Value (ANAV):Change 31/12/2002 – 31/12/2003 2 000 000 + 228 980 1 800 000 + 274 705 - 23 008 1 600 000 - 134 853 1 400 000 1 200 000 1 000 000 1 762 606 800 000 1 416 782 600 000 400 000 200 000 0 Anav Profit in 2003 Dividends Asset Value Other Anav 31/12/2002 Paid Adjustments 31/12/2003

11. ANAV: KBC RBC requirementsfor Life business

12. Value of Business in Force (VBI): Economic Assumptions * Based on the bond yield in the long run

13. Value of Business in Force (VBI): Non Econonomic Assumptions • Expenses • Expenses are allocated to the different products and activities in such a way that the total expenses in the study equal the total expenses in the statutory accounts • Expenses increase with expected wage inflation 2-3% per annum • Future expense reductions programs and synergies are not taken into account • Mortality • Assumptions based on most recent industry experience were used • Lapses • Assumptions based on annual experience, investigations of surrenders and paid-ups, with a reasonable safety margin • Assumptions are set on by product and distribution channel

14. Value of Business in Force (VBI): Overview (‘000 EUR, only reserves of modelled business)

15. Value of Business in Force (VBI): Sensitivity Analysis Effect on VBI * The discount rate is changed consistently with the change in investment return. No profit sharing was given to the 4.75% guarantees in the policies.

16. Changing the solvency margin Value of Business in Force (VBI): Sensitivity Analysis (‘000 EUR)

17. Value of Business in Force (VBI):Change 31/12/2002 – 31/12/2003 450 000 000 +14 416 570 +53 016 901 400 000 000 +3 159 540 +2 338 592 -36 357 152 +31 570 445 350 000 000 -61 265 326 300 000 000 372 798 434 365 918 865 250 000 000 200 000 000 VBI 31/12/2002 model Changes VBI 31/12/2003 Cashflow to ANAV Variances over 2003 Unwinding discounting VNB as of 31/12/2003 Change econ.assumptions Change non econ. assumptions (EUR)

18. Value of Business in Force (VBI): Change 31/12/2002 – 31/12/2003 Effect of ‘new business’ sold in 2003 (as at 31/12/2003): EUR (‘000 EUR)

19. Value of New Business (VNB): New business 2003 at date of sale (‘000 EUR)

20. Review Lane Clark & Peacock Belgium reviewed the methodology and assumptions used by KBC Insurance in the determination of the Embedded Value at 31/12/2003, the Value of 2003 New Business and the analysis of the change in the value of in-force business for the Life Insurance activities of KBC Insurance. It is the view of Lane Clark & Peacock Belgium, based on the data made available, that the assumptions used are reasonable and that the methodology used by KBC Insurance is in line with basic principles described in appropriate literature. Our assignment included a review of the calculations.This review was not a detailed verification of the correctness of all calculations. This review was a limited high-level reasonableness checks on the results and included a detailed review on a limited part of the insurance portfolio of KBC Insurance. No material issues have been discovered. Therefore, based on our work and our validation report on the work carried out by KBC Insurance, we consider the embedded value, the value of new business and the analysis of the change in the value of in-force for the life business to be reasonable and suitable for inclusion as supplementary information to the Group’s consolidated accounts.

21. Cautionary Statements Embedded Value is the result of cash-flow projections with underlyingassumptions and expectations. The values in this presentation are calculated on a deterministic basis. Many assumptions like general economic conditions, performance of financial markets, taxes, changes in laws, frequency and severity of insured loss events, mortality and morbidity levels and trends, and others are beyond KBC’s control. A modification of assumption can result in a significantly different Embedded Value. Deviations from assumed experience are normal and are to be expected. Even without any change in the parameters, actual results will vary from those projected due to normal random fluctuations. Embedded Value cannot be considered as an absolute value. This value together with a sensitivity analysis allows the recipient to obtain an idea of the magnitude of the expected value created by their insurance activities. Under no circumstances should the inclusion of the projections (including the relevant underlying assumptions and expectations) be regarded as a representation, warranty or prediction that the business will achieve or is likely to achieve any particular results.