1. Developing insurance activities in Central Europe, focus on Hungary David Truman, K&H Life Johan De Decker, Argosz Insurance Co.

2. Investor Day 2003 2 Developing insurance activities in Central Europe, focus on Hungary Overview insurance activities in CE K&H Life and the life market in Hungary ARGOSZ and the non-life market in Hungary

3. Investor Day 2003 3 Central European structures If we can acquire insurers, we will. If not, we will build CE insurance markets opened to foreign capital in late '80s / early '90s, earlier than KBC entry In early/mid '90s we had an incidental insurance presence in CE After KBC merger of 1998, CE became strategic development of 2nd home market In Central Europe our insurance operations are a mix of acquisition, strategic alliance, green-field and joint venture

4. Investor Day 2003 4 Current presence in Central Europe - Insurance Poland (non-life / life - 2001) Ranking:2nd/10th Market share:13%/1% Czech Republic (non-life / life- 2001) Ranking:5th/4th Market share:5%/10% Slovakia (non-life / life - 2002 ) Ranking:7th/7th Market share:2%/4% Hungary (non-life 1992 / life1998) Ranking:6th/14th Market share:4%/1% Slovenia ( life 2003) Start-up phase of life assurance cy Years given relate to year of entry by KBC As at 31.12.2002

5. Investor Day 2003 5 Relationships of KBC insurers to banks Poland Acquisition of Warta Building strategic alliance with Kredyt Bank Czech Republic Acquisition of CSOB Pojistovna (formerly IPB) Building strategic alliance with CSOB Slovakia Acquisition of Ergo (IPB related) Hungary K&H Life greenfield joint venture with K&H Bank Argosz building strategic alliance with K&H Bank Slovenia NLB Life greenfield and joint venture with NLB

6. Investor Day 2003 6 KBC in Hungary Effective ownership by KBC

7. Investor Day 2003 7 Overview insurance activities in CE K&H Life and the life market in Hungary ARGOSZ and the non-life market in Hungary Developing insurance activities in Central Europe, focus on Hungary

8. Investor Day 2003 8 K&H Life – the Company Integrated with K&H Bank, start up in 1999 Operates primarily as a product factory but also assists distributors with training, marketing & sales support Principal distribution is 163 branches of K&H Bank Predominant retail focus with saving, investment, credit linked & individual risk products Group products also manufactured for corporate clients 22 staff

9. Investor Day 2003 9 Life assurance market evolution in CE m EUR (current exchange rates) All these CE countries combined only circa 2 x KBC Insurance life premium income in Belgium

10. Investor Day 2003 10 Key success factors to green-field bancassurance Address positively bankers concerns over :  Product cannibalisation  Capital requirements  Diversion of management time  Cultural mismatch  Perceived additional workload Communication at all levels as regards reasoning and implications Integration as regards distribution and customer approach that is complementary to the change process

11. Investor Day 2003 11 Key success factors (continued) Differentiate products (simple, transparent, clarity as to objectives, value for money & innovative) Keep processes to a minimum and provide IT solutions that remove paperwork Avoid formalistic methods and break down the barriers of “my business, your business” Motivation of distribution, particularly through (integrated) incentive schemes

12. Investor Day 2003 12 K&H Life – a growing business 2003 = Plan Number of new individual policies Market share Policies per branch per annum

13. Investor Day 2003 13 K&H Life – foundations now in place Includes set-up costs Premium income In m EUR In '000 EUR Profit loss (*) 2003 = budget (Exchange at current EUR / HUF rates)

14. Investor Day 2003 14 K&H Life – next steps Extend : Distribution by furthering relationship with Argosz agents Product range by building on initial launch of Capital Guaranteed investment product Customer base through corporate client relationships Premium revenue doubling in 2003 to 17 m EUR. Further growth target of 50% in 2004 1 m EUR pre-tax profit in 2004 & circa 20% ROE in 2004

15. Investor Day 2003 15 Overview insurance activities in CE K&H Life and the life market in Hungary ARGOSZ Insurance Co. and the non-life market in Hungary Developing insurance activities in Central Europe, focus on Hungary

16. Investor Day 2003 16 ARGOSZ – background Essentially a non-life company Founded as greenfield in 1992 98% KBC owned

17. Investor Day 2003 17 From duopoly to free market Top two companies : market share of 63% Next 3 companies : market share of ca. 7% each Per capita non-life premium 2001 : 100 EUR (EU average : 733 EUR, Portugal : 349 EUR) Non-life premium as % of GDP 2001 : 1.9% (EU average : 3.2%, Portugal : 2.8%) Main products :Motor59% Property28% Non-life market situation in Hungary

18. Investor Day 2003 18 0 50 100 150 200 250 300 350 19922002 Income (in billion HUF) Annual income development non-life market in Hungary Non-life market situation in Hungary bn HUF

19. Investor Day 2003 19 -6 0 6 12 18 24 30 19922002 % Growth HUF % Growth EUR % Inflation HUF Non-life market situation in Hungary Annual percentage growth of the non-life market in Hungary and of inflation

20. Investor Day 2003 20 ARGOSZ – strategy Target markets : retail medium-sized companies agri clients Retail distribution through exclusive agents and K&H bank network SME & agri distribution also through brokers and direct Gain market share in a strongly growing market

21. Investor Day 2003 21 0 2 000 4 000 6 000 8 000 10 000 12 000 19932002 Income ARGOSZ – income development Average annual market share growth of 0.38% over 10 years In m HUF

22. Investor Day 2003 22 ARGOSZ – income development 0 20 40 60 80 100 120 19932002 % Growth HUF % Growth EUR % Inflation HUF Annual % growth as compared to inflation

23. Investor Day 2003 23 ARGOSZ – product mix, 1994 Total income 1994 : EUR 2.9 m

24. Investor Day 2003 24 ARGOSZ – product mix, 2002 Total income 2002 : EUR 47.3 m

25. Investor Day 2003 25 In m EUR2000200120022003 (budget) 2005 (budget) Income23.931.747.458.884.7 Income growth25%33%50%24%17% Net loss ratio69%67%70%71% Gross cost ratio38%35%31%30%27% Net combined ratio109%101%103%100%98% Result before tax0.12.11.63.04.8 ROE after tax *Break- even 20.3%9.5%15.3%18.5% Solvency margin **158%300%245%N/A ARGOSZ – key figures Amounts in EUR (at EUR 1 = HUF 245 for 2003 and beyond) 2002 Head count175 Agent count586 * tax at 18 pct rate for 2003 and beyond ** as pct of minimum legal required

26. Investor Day 2003 26 ARGOSZ – future objectives Strong growth Organic market share growth of 0.5% per year No. 5 in non-life ranking in 3 years from now While maintaining healthy technical results Expense ratio of 25% or less Net loss ratio of less than 72% Combined ratio towards 95% Generating a ROE of 18% or more (after tax)

27. Investor Day 2003 27 ARGOSZ – factors for sustained success "Ownership" of distribution (tied agents) Emphasis on cross-selling by agents Bancassurance (K&H Bank) Focus on the bottom-line Excel in basic non-life skills : Pricing Risk selection Claims control