It doesn't matter, but that sounds odd to me: it means no alarm, just
an immobiliser.
http://www.thatcham.org/security/pdfs/categories/PassengerCarCAT1.pdf
says A4, all models, from March 01on have a Category 1 system. Do you
really only have an Audi Immobiliser (category 2) rather than Audi
Security System I (category 1)? (Category 1 is better than category 2,
so you meet your insurer's requirements either way.)

As a matter of curiosity, which insurer is it? I'm a bit surprised
that they didn't require category 1. Last time I used an insurer that
needed me to check the category, they required me to have a category 1
system. (I did - that was on a '98 BMW 3 Series.) When I bought my A4
and switched to my present insurer, they didn't ask, presumably
because they already knew what I had as standard and were satisfied
with it.

Peter.