Press release

Ageas further reduces its exposure to Southern European countries

In the context of ongoing uncertainties in the financial markets, Ageas has continued to reduce the concentration on Southern European countries of its investment portfolio.

On 12 May, Ageas disclosed its sovereign exposures as of 10 May 2010. Between 10 May and 21 May, Ageas has sold additional Southern European government bonds for a total amount of EUR 4.8 billion (at historical/amortized cost) broken down as follows: Greece - EUR 1.7 billion, Italy - EUR 2.1 billion, Portugal - EUR 0.9 billion and Spain - EUR 0.1 billion.

Since the end of last year, net sales of these bonds amount to:

· Greece: EUR 2.1 billion

· Italy: EUR 4.8 billion

· Portugal: EUR 1.7 billion

· Spain: EUR 0.2 billion

· Total: EUR 8.8 billion

As of 21 May 2010, the total exposure of Ageas to the above-mentioned countries is as follows (at historical/amortized cost):

· Greece: EUR 2.2 billion

· Italy: EUR 3.8 billion

· Portugal: EUR 1.3 billion

· Spain: EUR 1.8 billion

· Total: EUR 9.1 billion

The vast majority of the Portuguese government bonds are held by the Portuguese company Milleniumbcp Fortis, a 51/49 partnership between Ageas and Milleniumbcp. The remaining exposure to Southern European governments essentially relates to the investment portfolio of AG Insurance.

The total exposure to government bonds amounts to EUR 33.3 billion (including EUR 1.2 billion unrealized capital gains) on a total investment portfolio of approximately EUR 60 billion.

Proceeds of these sales have been reinvested predominantly in government bonds of Belgium, Germany, the Netherlands and France and to a lesser extent in corporate bonds. As a result, Ageas's investment portfolio reflects a more balanced geographical exposure within the EU and it continues to mirror the long-term nature of its liabilities. The majority of assets are invested in fixed income securities with high ratings and relative long-term durations.

The rebalancing of the portfolio has resulted in both capital gains and losses. The gross impact of these sales will be mitigated by, among others, taxation effects and the respective share Ageas has in the operating companies. The one-off negative impact on net profit until 21 May is estimated to be in the range of EUR 55-65 million. The recurrent impact on net profit from the loss of yield as a result of these sales will be mitigated through further rebalancing of the investment portfolio going forward.

Bart De Smet, CEO Ageas, commented: "At the end of last year we decided to gradually reduce our exposure to Southern European countries subject to opportunities and liquidity in the market. Due to increased market uncertainties, we chose to accelerate the rebalancing of our portfolio in the second quarter. As the markets evolve, Ageas will continue to reassess the risk-reward profile of available asset classes and opportunities taking into account the long-term nature of our liabilities. We also welcome the earlier decision of S&P to reaffirm the ratings of Ageas and its operating companies.

We believe investors and customers can take comfort from these actions and our continued very strong solvency and liquidity position in these times of uncertainty and volatility in the markets. Our solid basis will allow us to continue to develop our strategy as a top class insurance company in Europe and Asia."

Ageas is an international insurance company with a heritage spanning more than 180 years. Ranked among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its business activities in Europe and Asia, which together make up the largest share of the global insurance market. They are grouped around four segments: Belgium, United Kingdom, Continental Europe and Asia. It is an undisputed leader in the Belgian market for individual life and employee benefits, as well as a leading non-life player, through AG Insurance. Internationally Ageas has a strong presence in the UK, where it is the third largest player in private car insurance. The company also has subsidiaries in France, Germany, Turkey, Ukraine and Hong Kong. Ageas has a track record in developing partnerships with strong financial institutions and key distributors in different markets around the world and successfully operates partnerships in Luxembourg, Italy, Portugal, China, Malaysia, India and Thailand. Ageas employs more than 11,000 people and has annual inflows of almost EUR 16 billion.

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