Fortis, KASIKORNBANK and Muang Thai Group forge stronger ties

On 9 November 2009, Fortis Insurance International NV, KASIKORNBANK and other shareholders of Muang Thai Group Holding ("Muang Thai") signed agreements for KASIKORNBANK to increase its shareholding in Muang Thai from 10% to 51%.

This transaction is an important milestone for Muang Thai and Fortis to forge closer ties with KASIKORNBANK and is expected to accelerate the highly successful relationship between the Bank and the Muang Thai companies.

Fortis entered the joint venture in Thailand in June 2004. Since then, Muang Thai, through its affiliates, has grown gross inflows Life on average by 24% per year, improving its market position in Life Insurance from number 7 to number 3 with a market share of 8.5%. In Non-Life Insurance Muang Thai's market position evolved from number 15 to number 5. The company has developed into a full-fledged and significant multi-channel distributor with market leadership positions in bancassurance and agency productivity^[1].

The strategic, financial and commercial and highlights of this transaction for Fortis are:

• As a result of the entrance of KASIKORNBANK as a major shareholder in the Muang Thai partnership, the economic interest of Fortis in the life insurance activities changes from 40% to 31% and for the non-life insurance activities from 15% to 12%^[2].
• After completion of the transaction, Fortis will receive net proceeds of EUR 41 million, having invested EUR 63 million in the venture from 2004 through 2008.
• Fortis maintains its Board representation and management participation in the Muang Thai companies.
• Strong endorsement of the bancassurance distribution model, further solidifying the long term relationship with KASIKORNBANK.
• Solid basis for an acceleration of growth in sales, earnings and value creation.

Bart De Smet, CEO Fortis, commented: " We welcome the stronger commitment of KASIKORNBANK to Muang Thai. The joint venture in Thailand reflects the strength and value creation opportunities of our Asian businesses. Our investment in Thailand meets Fortis' three key strategic goals of (i) reaching critical size, (ii) making sizable contributions to Fortis' insurance earnings, and (iii) generating attractive returns to our shareholders. This transaction demonstrates the solid commitments from Muang Thai, KASIKORNBANK and Fortis to build an even stronger partnership with the ambition to drive the business to new heights. I am confident that this will accelerate the value creation for all stakeholders".

Dennis Ziengs, CEO Fortis Insurance Asia continued: "When Fortis entered into the joint venture with Muang Thai in 2004, it was looking for a long term presence in this market. As a result of the significant achievements over the past 5 years, the joint venture has made solid profit contributions and created substantial value for Fortis. We expect Muang Thai, with its broader and stronger shareholder base, to reach the top position in the Thai life insurance market. In order to achieve this ambition, Fortis will continue to support Muang Thai, especially in the areas of commercial development and actuarial, risk and asset management."

The transaction is expected to be completed in early 2010, subject to regulatory approvals.

With insurance as core business, Fortis (www.fortis.com) employs over 10,000 people in Belgium and internationally. Its four key markets are Belgium, the United Kingdom, Continental Europe and Asia. Fortis's 75%-owned subsidiary AG Insurance is the long-established leader in its domestic Belgian Life and Non-Life insurance markets. It is also a leading player in the Employee Benefits segment. Outside Belgium, the wholly-owned subsidiary Fortis Insurance International is active in the three other markets through direct subsidiaries, joint ventures and local partnerships. Fortis is set to become the second largest motor insurer in the UK and the company is also applying its know-how in Asia to build high value-added partnerships. In 2008, 54% of Fortis's insurance revenues were generated by the Belgian market and 46% by the three other markets. Fortis additionally holds a 45% interest in the structured credit portfolio entity Royal Park Investments, and is the 100% owner of several financing vehicles, of which it manages the assets and liabilities. The company is listed on Euronext (Brussels - Amsterdam).

KASIKORNBANK PUBLIC COMPANY LIMITED, formerly known as Thai Farmers Bank Public Company Limited, was established on June 8, 1945 and is listed on the Stock Exchange of Thailand since 1976. As of September 30, 2009 the Bank had authorized share capital of Baht 30.5 billion, of which the issued and fully paid-up share capital was Baht 23.9 billion. Total assets are currently at Baht 1.24 trillion. The Bank is the fourth largest bank in Thailand with market share in term of asset at 14.4%. The Bank operates 732 branches with 6,052 ATMs across Thailand. Our four overseas branches are located in Los Angeles, Hong Kong, the Cayman Islands, and Shenzhen; and there are three representative offices in Shanghai, Beijing, and Kunming.

Muang Thai Life Assurance Company Limited, "the Company for Forward Thinking People", was founded on 6 April 1951. Since then, it has grown into a leading life insurance company in Thailand with multi-channel distribution network including bancassurance, agency, affinity, telemarketing, and direct marketing channels. Muang Thai Life has assets of over Baht 64 billion, insurance reserves of over Baht 54 billion, and solvency margin of 726% of statutory requirement. Muang Thai Life provides over 300 insurance plans to its policyholders and services them through its own 130 branches, partners' distribution channels such as bank branches and hypermarket branches, agency offices, and its Muang Thai Smile Hot Line 1766. Muang Thai Life received AA local rating and BBB+ international rating, both with stable outlooks by Fitch Ratings. Standard & Poor's accredited the company with BBB+ rating with a stable outlook.

[1] The Prime Minister of Thailand recently conferred the prestigious industry's first prize of the "Prime Minister's Insurance Award" and the "Winner and Honour of the Prime Minister's Insurance Award 2008" to Muang Thai Life. Last year's achievement marked the 3rd consecutive year that the company received the accolade of "best managed insurance company" in Thailand.[2] Fortis' direct shareholding interest remains unchanged at 25% for life activities, and 10% for non-life activities.