Spain

Current position

• Fourth position in the market with a strong bancassurance presence
• 7% market share
• Major protection provider, resulting in strong new business margin
• Expense efficiency achieved through central bancassurance platform
• Acquired additional 45% stake in Caja Murcia in March 2008

FY 2008 Performance

• PVNBP sales of £2.5bn (2007: £2.4bn)
• New business contribution (g/g) increased to £236m, with a margin (g/n) of 9.3% (2007: 7.4%) reflecting contribution of Cajamurcia risk portfolio transfer
• Life MCEV operating return of £286m (2007: £233m), IFRS operating profit of £155m
• Impact of Caja Murcia risk portfolio transfer in 2008
  • PVNBP £83m
  • NBC (g/g) £41.6m
  • Margin (g/g) 50%

Distribution

• Primarily through bancassurance network giving nationwide distribution

2008 PVNBP

Strategy

• Maintain top five position
• Further develop bancassurance relationships and continue to develop agent and broker business
• Develop further products
• Focus on high margin products and the preservation of capital
• Transforming to a shared service centre with cost reduction being a focus