I - Insurance & financial liabilities and revenue

At 31 December 2007, insurance and financial liabilities totalled €235.5 billion excluding deferred participation on fair value adjustments, an increase of 8.3% compared with year-end 2006 and 9% on average over the period.

Including the deferred participation reserve, which fell to €8.7 billion at 31 December 2007 from €12.1 billion at end-December 2006 due mainly to the year-on-year rise in interest rates, total insurance and financial liabilities came to €244.2 billion.

As announced in the 7 February 2008 press release, consolidated premium income for 2007 totalled €31,529.5 million, down 1.4% from the previous year on a reported basis and 1.9% like-for-like. Like-for-like figures exclude the contribution of Spanish subsidiary CNP Vida, which was consolidated from 5 April 2007.

II - Impact of the summer 2007 financial crisis

In August and November 2007, CNP published details of its asset-backed securities (ABS) exposure. CNP has no direct exposure to US subprime mortgages and its indirect exposure is a very low €10 million. Its total exposure to asset-backed securities at 31 December 2007 remained stable at €5.6 billion.

As with all portfolios, asset-backed securities were analysed in depth and valued using the appropriate methods during the preparation of the Company’s financial statements.

Overall, there were only limited changes in the fair value of asset-backed securities due to the high quality of the portfolios and an absence of default on the underlying assets. Changes in fair value represented a negative impact of €47 million before taxes, of which €41 million was dealt with through profit or loss and €6 million through equity.

The Audit Committee welcomed the information provided by Executive Management regarding the very limited impact of the financial crisis on CNP Assurances’ accounts.

III - Results

As in the first half of the year, the acquisition of an additional 50% interest in Ecureuil Vie, finalized on 20 February 2007, had a significant impact on attributable recurring profit and profit attributable to equity holders of the parent, by eliminating minority interests in this subsidiary.

1) EBIT 

EBIT surged 21% to €1,837 million, including like-for-like growth of 20%.  This reflects robust growth in technical reserves, which advanced nearly 9% over the period and generated more than 80% of Group revenue in 2007. EBIT growth was powered by the Pensions business in Brazil and the Personal Risk business (health, personal risk, loan and property & casualty insurance) in France and Italy.

The Savings business contributed €1,090 million (up 16%) to total EBIT, the Pensions business €158 million (up 21%) and the Personal Risk business €529 million (up 28%).

International subsidiaries contributed €439 million, or 24% of total EBIT, up 22% year-on-year.

 2) Impact of changes in financial markets on 2007 earnings

Based on total assets of €262 billion, year-on-year changes in the financial markets, and in particular the rise in interest rates, had a limited impact on earnings. Net impairment losses had a negative €67 million impact on attributable recurring profit, more than offset by realised capital gains of €125 million on the corresponding portfolio. As shown in the table below, capital gains on equities and investment property result in a positive impact of €58 million on attributable recurring profit net of impairment losses. Fair value adjustments to trading securities had a positive net impact of €44 million on profit attributable to equity holders of the parent.