1999 Worldwide life & savings new business

• Worldwide new business increased by 33% to Ł7,094m.
• New annual premiums up 76% to Ł744m, including Ł282m from Polish pensions.
• Single premium sales 29% higher at Ł5,580m.
• ISA, PEP, unit trust and UCITS sales up 29% to Ł770m.

Bob Scott, Group Chief Executive, commented:

"Our life and savings businesses produced an excellent performance in 1999 with new business sales up 33% to a record Ł7.1 billion. There was strong life and pensions growth in the UK, good performances in France and the Netherlands, and our Polish business captured a large share of the new pensions market, with new annual premiums totalling Ł282m in 1999.

We continue to build on the Group's strong position in the UK and Continental European life and savings markets and broaden our multi-distribution capability."

Enquiries:
Media: Robbie Graham, Director of Life Development	+44 (0) 171 662 2050
Analysts/Investors: Steve Riley, Head of Investor Relations	+44 (0) 171 662 8115
UK Trade Press: Fran Elliot, Public Relations Manager	01904 452 172 07968 934035 (mobile)

	New Single Premiums		New Annual Premiums		Investment Sales (ii)		TOTAL
	1999 Łm	Local Currency Growth %	1999 Łm	Local Currency Growth %	1999 Łm	Local Currency Growth %	Local Currency Growth %
United Kingdom	2,655	34	171	1	641	36	33
France	1,328	20	13	12			20
Netherlands (iv)	340	16	84	9			15
Italy	768	21	42	(14)			19
Poland - life	13	163	57	12			25
Poland - pensions	n/a	n/a	282	n/a			n/a
Germany	90	n/a	39	n/a			n/a
Other Europe	185	140	12	21	129	5	55
Rest of World	201	(5)	44	16			(1)
TOTAL	5,580	29	744	76	770	29	33

Notes:

1. Average exchange rates used and premiums are gross of reassurance
2. Includes ISAs, PEPs, unit trusts and UCITS (collective investments sold throughout Europe and Asia).
3. Growth excludes sales from businesses disposed of.
4. Figures include Ł3m in single premiums and Ł0.5m in annual premiums from Nuts Ohra. Excluding Nuts Ohra, single and annual premiums were 15% and 8% higher respectively.

UK : We were pleased to announce in November 1999 the agreement to acquire a 50% shareholding in the Royal Bank of Scotland's life assurance subsidiary, Royal Scottish Assurance. CGU will also provide administration and asset management services and the joint venture is due to commence in the first half of 2000.

CGU Life's total sales of new life, pensions and investment business rose by 33% to Ł3.5bn, benefiting from strong sales in the fourth quarter of 1999. There was good growth through IFAs and buoyant sales through our other channels (building society partners, estate agents and direct business), with NAPI sales up 14% and 36% respectively (NAPI is new annual premiums plus a tenth of new single premiums and investment products).

New single premiums increased by 34% to Ł2,655m, mainly reflecting a 52% increase to Ł1,852m in sales of our flagship investment product, the Portfolio Bond. Our focus on pensions business has increased single premium pensions sales by 14% to Ł740m. This included an 18% increase to Ł400m in individual pension sales and new group pensions sales were up 9% to Ł340m.

New annual premiums were up strongly in the discrete fourth quarter and totalled Ł171m for the year (1998 Ł170m). Our clear pensions stance, allowing all customers who have bought annual premium personal pensions since CGU Life was launched to enjoy penalty free transfers into a new Stakeholder pension when it is introduced, has enabled us to significantly outperform a declining pensions market, with annual premium pensions up 10% at Ł110m. This included a 16% increase to Ł66m in individual pension sales and group sales of Ł44m were 2% higher. Mortgage protection sales were higher in 1999, offset by lower mortgage endowment sales of Ł33m (1998 Ł45m).

New investments into ISAs, unit trusts and PEPs were 36% higher at Ł641m. In 1999, strong PEP sales were maintained and we made a smooth transition to ISAs. The CGU ISA had a successful launch in April with sales of Ł212m achieved in 1999, and we rank second in the corporate bond ISA market.

France : Strong growth continued into the fourth quarter producing a good increase for the year. In a market dominated by single premium sales, new single premium business at CGU France was up 20% to Ł1,328m, against market growth of some 13%. AFER's excellent return record helped boost bond sales by 45% to Ł712m, and the recently announced investment yield of 6.23% for 1999 will ensure a competitive position in 2000. AFER is the largest savings organisation in France, with over 500,000 members, and over Ł14bn of funds under management. SFER, the unit-linked product of AFER, continued to grow, representing 16% of AFER's total new business and 7% (1998 c.2%) of AFER's total funds.

Unit-linked sales (including Ł135m in unit-linked AFER sales) and other savings products were up 2% at Ł482m and group protection sales were Ł134m (1998 Ł144m).

Netherlands : Delta Lloyd Nuts Ohra produced a good performance in 1999, boosted by good sales in the fourth quarter. New annual premiums increased by 9% to Ł84m, reflecting strong sales of Delta Life, our unit-linked universal life product, which were up 37% to Ł18m. Increased pensions business, including the acquisition of a new group pension scheme during the year, boosted single premiums by 16% to Ł340m.

The acquisition of Nuts Ohra was completed in the fourth quarter of 1999 and it contributed Ł0.5m and Ł3m in annual and single premium sales respectively. The combined company, Delta Lloyd Nuts Ohra, is a major life and pensions player, ranking third in this important market.

Italy : Total new business sales were higher than in 1998, with single premium sales increasing to Ł768m and annual premiums of Ł42m.

Strong growth in sales of our unit-linked savings products continued through our newest bancassurance arrangements. Banca delle Marche, which sells through 250 branches based in the centre of Italy, has generated Ł55m in single premiums since its launch in September 1999. Banca Popolare di Lodi, where we sell through 250 branches, mainly in the north and south of the country, achieved Ł5m (1998 Ł2m) in annual premiums and Ł34m (1998 Ł3m) in single premium sales.

Poland : In Poland, we have achieved exceptional success in capitalising on the major opportunity provided by the privatisation of pensions provision. We are the leading pensions business, capturing a market share of over 20% by number of customers and 30% by funds under management. New annual pension premiums of Ł282m were received in 1999, representing the processing of 1.6m pensions cases, with a further 0.5m applications in the pipeline to be processed during 2000.

The pensions growth has built on the success of our existing life operations and created a major business in Poland, with a customer base of over 3 million and the potential to cross sell our products.

In a year where our sales team focused on the pensions opportunity, a 12% increase in annual premium life sales to Ł57m and a 163% increase to Ł13m in single premiums, represents a good performance. Including both life and pensions sales, new annual premiums were Ł339m for the year.

Germany : Berlinische Leben produced strong annual premium sales of Ł39m, with Ł15m in the discrete fourth quarter (Q4 1998 Ł9m), reflecting new product launches and increased marketing activity. Single premium sales of Ł90m were achieved reflecting good sales of pension and annuity business. During 2000 we will continue to refocus the business to sell higher margin equity-linked and group pensions products.

In Ireland, excellent single premium investment bond sales of Ł145m were achieved in 1999 and the acquisition of The Hibernian Group provides new customers and additional distribution power to market with-profits policies. We have been successfully developing our Turkish business in recent years and now rank fourth in the market for new business, with annual premium sales 130% higher at Ł16m in 1999. Our cross-border business in Luxembourg added Ł129m in UCITS sales following good fourth quarter sales.

In the United States, single premium sales were 6% lower at Ł172m, reflecting good sales of a new deferred annuity product being offset by reduced demand for immediate annuities. Following our withdrawal from the unprofitable group health market, annual premiums were 19% lower at Ł20m. In Canada, new annual premiums were 28% higher at Ł7m reflecting increased sales of protection and annuity products and single premiums were 7% higher at Ł28m.

Asset Management

CGU is one of the top 20 fund managers in Europe, managing worldwide assets of over Ł125bn.

In 1999 we attracted over Ł8bn in new funds worldwide, including Ł7.1bn in new life and savings business and over Ł1bn in third party mandate investments. Strong long term investment performance helped to attract these funds, with our UK third party pension fund ranking in the top quartile over the last 5 years.

Two of our main investment businesses won awards during 1999. The Financial Times named our UK business, Morley Fund Management, as the third best performer of all institutional fund managers of third party pension funds, and in France, Victoire Asset Management was nominated by the influential Mieux Vivre magazine as the country's best insurance asset manager.

Notes to Editors

• CGU is Europe's 5th largest insurance group and the largest in the UK (based on worldwide sales of some Ł18bn per annum).
• Life and savings represents just over half of CGU's total business.
• The geographical split of total life, pensions and retail investment sales for 1999 was:

• 	%
  United Kingdom	49
  France	19
  Netherlands	6
  Italy	11
  Poland	5
  Germany	2
  Other Europe	5
  Rest of World	3
  	100

• Distribution of UK life and savings products using NAPI (new annual premiums plus a tenth of new single premiums and investment products) for 1999 was:

• 	%
  IFAs	66
  Partnership/Direct	34
  	100

• All growth rates are quoted in local currency.
• CGU's 1999 results will be reported on 23 February 2000.

	New single premiums			New annual premiums			Investment sales (ii)
	12 months			12 months			12 months
	1999 Łm	1998 Łm	Local currency growth %	1999 Łm	1998 Łm	Local currency growth %	1999 Łm	1998 Łm	Local currency growth %
United Kingdom
Individual pensions	400	340	18	66	57	16
Group pensions	340	311	9	44	43	2
Mortgage	-	-	-	40	49	(18)
Other life	1,915	1,323	45	21	21	-
PEPs/ISAs/unit trusts	-	-	-	-	-	-	641	473	36
	2,655	1,974	34	171	170	1
France
AFER (excl. unit-linked)	712	501	45	-	-	-
Unit-linked & other savings	482	483	2	12	11	16
Group protection business	134	144	(5)	1	1	(27)
	1,328	1,128	20	13	12	12
Netherlands (iv)
Individual pensions	89	84	7	-	-	-
Group pensions	174	114	56	23	23	-
Universal life	18	16	13	18	13	37
Other individual life	48	66	(26)	34	35	1
Group life	11	17	(35)	9	8	22
	340	297	16	84	79	9
Italy
Unit-linked	640	588	11	15	11	39
Savings, protection & other	128	60	119	27	39	(29)
	768	648	21	42	50	(14)
Poland
Life & savings	13	5	163	57	57	122
Pensions	-	-	-	282	-	n/a
	13	5	163	339	57	560
Germany
Life & savings	30	14	n/a	18	9	n/a
Pensions & annuities	60	24	n/a	21	7	n/a
	90	38	n/a	39	16	n/a
Other Europe
Life & pensions	185	79	140	12	10	21
UCITS	-	-	-	-	-	-	129	129	5
	185	79	140	12	10	21
United States
Life assurance	6	9	(32)	9	14	(41)
Pensions & annuities	166	170	(5)	11	10	(14)
	172	179	(6)	20	24	(19)
Other	29	27	7	24	13	84
TOTAL	5,580	4,375	29	744	431	76	770	602	29

Notes:

1. Average exchange rates used and premiums are gross of reassurance
2. Includes ISAs, PEPs, unit trusts and UCITS (collective investments sold throughout Europe and Asia).
3. 1998 figures exclude sales from businesses disposed of.
4. 1999 figures include Ł3m in single premiums and Ł0.5m in annual premiums from Nuts Ohra. Excluding Nuts Ohra, single and annual premiums were 15% and 8% higher respectively.