1. Embedded Value and Analysis of Change KBC Insurance business as at 31/12/2002

2. Agenda KBC Life Insurance Activity & Scope Terminology ANAV (“Adjusted Net Asset Value”) Components Roll forward 2001-2002 VBI (“Value of Business In Force”) Components Assumptions Sensitivities Roll forward 2001-2002 VNB at date of sale (“Value of New Business”)

3. KBC Life Insurance Activity & Scope

4. KBC Insurance Group: Life Activity Technical Provisions KBC Insurance (part Unit Linked) 20012002 KBC Insurance (Belgium)5 800 356 (2 661 792) 6 567 436 (2 543 975) Fidea (Brokerage Belgium)558 305 (26 160) 610 730 (27 074) Vitis Life (Luxembourg)1 127 696 (262 853) 985 198 (240 433) Others (CSOB, K&H Life,…)96 215 (1 303) 533 932 (1 709) Total 7 589 874 (2 952 108) 8 697 296 (2 813 191) (‘000 EUR)

5. KBC Insurance Group: Life Activity Growth in Total Life Premium Income 1998-2002 (‘000 EUR) 1 079 465 100% 1 341 980 122% 1 867 037 170% 1 666 842 152% 2 230 521 203% 926 707 407 478408 475 437 679 1 259 859 170 758 934 502 1 458 562 1 229 163 970 662 0 500 000 1 000 000 1 500 000 2 000 000 2 500 000 19981999200020012002 Non LinkedUnit Linked

6. KBC Insurance Group: Life Activity Growth in Technical Provisions Life 1998-2002 (‘000 EUR) 8 697 296 199% 7 589 874 174% 6 783 772 155% 5 662 602 129% 4 373 520 100% 4 162 741 4 467 156 4 497 804 4 637 766 5 884 105 1 195 446 2 285 968 2 952 108 2 813 191 210 779 0 1 000 000 2 000 000 3 000 000 4 000 000 5 000 000 6 000 000 7 000 000 8 000 000 9 000 000 10 000 000 19981999200020012002 Non LinkedUnit Linked

7. Main Distribution Channels Life Activity KBC Bank branches  Savings and investment products  Credit-linked risk covers Insurance agents and other  Savings products  Group insurance (Mainly SME, partially based upon referrals from bank branches) Fidea Brokerage Vitis Life operation services from Luxembourg

8. Scope Subsidiaries under review KBC Insurance Belgium + Fidea + Vitis Life total technical provisions :8 163 364 Modelled: 87 % of the mathematical reserves 92.8 % of the total premium income in 2002 99.7 % of the new premium income in 2002 Subsidiaries not under review Central European Subsidiaries (CSOB, Warta Vita, K&H Life,…) total technical provisions : 533 932

9. Terminology

10. PV Tied Surplus Life Value In Force Terminology “Embedded Value” Shareholders Equity Economic Adjustments ANAV = As investment for Embedded Value > Equity adjustments > Asset adjustments > Resilience Reserves > Tax assets and liab. Tied Surplus Life ANAV Other Surplus PVFP* VBI** (PVFP- Cost Tied Surplus) Tied Surplus Life oror KBC standard Embedded Value Other Surplus Other Surplus = Tied Surplus Non Life + Other Tied Surplus +Free Surplus *PVFP = Present Value of Future Profits **VBI = Value of Business In Force

11. Embedded Value: global figures (‘000 EUR) 31/12/200131/12/2002 VBI Life PVFP Cost of tied surplus 425 143 545 909 (120 766) 365 919 511 060 (145 141) Tied Surplus Life546 683588 026 Value In Force971 826953 945 Other Surplus1 989 929828 716 Embedded Value 2 961 7551 782 661

12. ANAV

13. 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

14. ANAV : as at 31/12/2002 ('000 EUR) +8 458 -476 892 +186 752 +259 007 -151 513 1 590 931 1 416 742 0 200 000 400 000 600 000 800 000 1 000 000 1 200 000 1 400 000 1 600 000 1 800 000 shareholders equity equity adjustments asset adjustments additional reserves non life additional reserves life tax assets and liab. ANAV

15. ANAV Change 31/12/2001 – 31/12/2002 +346 868 -190 080 -1 185 451 -91 207 2 536 612 1 416 742 0 500 000 1 000 000 1 500 000 2 000 000 2 500 000 3 000 000 3 500 000 ANAV 31/12/2001 Profit in 2002 Dividends Paid Asset Value Adjustments Other ANAV 31/12/2002

16. Value of Business In Force (“VBI”)

17. KBC RBC requirements for Life business KBC RBC Requirements (legal requirements) % of the reserves % of sum at risk Unit Linked with legal SM > 0 1.25% (1%) 0.375% (0.3%) Unit Linked with legal SM = 0 0.5% (0%) 0.0% (0.3%) Non Linked invested in a 75 B./ 20 S./ 5 P. mix 9.2% (4%) 0.375% (0.3%) The current RBC for Life activities is 197.9% of the legal required solvency margin for the Life Activity

18. VBI: Economic Assumptions 20012002 10 year bond yield (Rate from 2005 on) 5.50% pa (5.50%) 4.40% pa (5.00% pa) Risk Prem. on equity3.30% pa2.50% pa Risk Premium used for discount rate 3.30% pa3.50% pa Discount rate* (= Cost of Capital) 8.80% pa*8.50% pa* Wage inflation3.79% pa2.80% pa *Based on the bond yield in the long run

19. 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 wage inflation % (2.80% pa) 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

20. VBI Overview (‘000 EUR, only reserves of modelled business) PVFPVBI VIFPVFP/ reserves VBI/ res. reserves 2001*545 909425 143971 8268.65%6.74%6 311 493 2002511 060365 919953 9457.19%5.15%7 104 098 *2001 Based on data of KBC Insurance Belgium

21. + 10%- 10% Expenses- 4.24%+ 4.24% Lapses- 2.10%+ 2.28% Mortality- 3.45%+ 3.45% + 0.5%- 0.5% Discount rate- 7.16%+ 7.64% Investment Return*+ 2.76%- 6.94% VBI : Sensitivity Analysis Effect on VBI * The discount rate is changed consistently with the change in investment return

22. VBI : Sensitivity Analysis Current RBC KBC Insurance 100% of the legal SM 150% of the legal SM 200% of the legal SM Embedded Value 1 782 6611 856 1031 820 2501 784 387 VIF953 945736 570849 322962 073 VBI365 919439 361403 508367 645 Changing the solvency margin (‘000 EUR)

23. VBI Change 31/12/2001 – 31/12/2002 (EUR) 425 142 515 365 918 865 +5 664 635 +37 911 029 -57 146 590 +75 793 801 -11 054 525 -42 569 640 -67 822 360 200 000 000 250 000 000 300 000 000 350 000 000 400 000 000 450 000 000 500 000 000 550 000 000 VBI 31/12/2001 Change non econ. assumptions Unwinding discounting Cashflow to ANAV VNB as of 31/12/2002 Variances over 2002 Change in taxation Change econ.assumptions VBI 31/12/2002

24. VBI Change 31/12/2001 – 31/12/2002 Effect of changing non economic assumptions: 5 664 635 EUR (in ‘000 EUR) Total% Mortality5 3821.27% Lapses- 7 796-1.83% Expenses6 8331.61% Other1 2460.29% Total 5 6651.33%

25. VBI Change 31/12/2001 – 31/12/2002 Effect of ‘new business’ sold in 2002 (as at 31/12/2002): 75 793 801 EUR APE (Annualised Premium Equivalent) PVFP of new business at 31/12 VNB of new business at 31/12 PVFP as % of APE VNB as % of APE 2002 195 250104 99875 79453.78%38.82% (‘000 EUR)

26. VBI Change 31/12/2001 – 31/12/2002 Effect of deviations during 2002: -11 054 525 EUR Investment returns in 2002: - 23 206453 EUR Lapse, mortality, extra premium income, miscellaneous + 12 151 928 EUR Effect of changing prospective economic assumptions: - 110 392 000 EUR - 42 569 640 EUR The impact of the tax reform in 2003 -67 822 360 EUR This amount is due to changing the interest expectations and the change in the expected risk premium on equity.

27. Value of New Business

28. VNB New business 2002 at date of sale APE (Annualised Premium Equivalent) PVFPVNBPVFP as % of APE VNB as % of APE 2001* 129 78653 42245 09541.41%34.96% 2002 195 25092 87264 58747.57%33.08% (‘000 EUR) APE Non Linked = regular premium + single premium / 10 APE Unit Linked = total premium / 10 *Based on data of KBC Insurance Belgium

29. Review “B&W Deloitte reviewed the methodology used to calculate the embedded values, the value added by new business and the analysis of change in the value of inforce.” “B&W Deloitte reviewed the assumptions used in the calculation of the embedded value and the value added by new businesss for reasonableness based on the information available” “Based on our work and our validation report on the work carried out by KBC Insurance, we consider the embedded values, 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”

30. Cautionary Statements “The calculation of embedded values necessarily makes numerous assumptions with respect to economic conditions, operating conditions, taxes, and other matters, many of which are beyond the KBC’s control. Although the assumptions used represent estimates which KBC Insurance and B&W Deloitte believe are reasonable, actual future experience will vary from that assumed in the calculation of the embedded value results, and such variation may be material. Deviations from assumed experience are normal and are to be expected. Even without any change in perceived environments, and in parameters used to reflect them, actual results will vary from those projected due to normal random fluctuations. Consequently, the inclusion of the embedded value herein should not be regarded as a representation by B&W Deloitte that the stream of future after-tax statutory profits discounted to produce these values will be achieved. The embedded value presented in this report is based on common actuarial practice with regard to valuation methodology and assumptions. The values are calculated on a deterministic basis. Therefore they do not necessarily capture the cost of any investment guarantees. Our work has not considered the impact of alternative valuation methodologies such as fair values. “

31. Embedded Value and Analysis of Change KBC Insurance as at 31/12/2002