2014 Head office: Ballam Road, Lytham St.Annes, FY8 4JZ Annual PRA Insurance Returns for the year ended 31 December 2014 IPRU(INS) Appendices 9.1, 9.2, 9.3, 9.4, 9.4A, 9.5, 9.6

Balance Sheet and Profit and Loss Account Contents Form 1 Statement of solvency - general insurance business 1 Form 2 Statement of solvency - long-term insurance business 2 Form 3 Components of capital resources 3 Form 11 Calculation of general insurance capital requirement - premiums 6 amount and brought forward amount Form 12 Calculation of general insurance capital requirement - claims 8 amount and result Form 13 Analysis of admissible assets 10 Form 14 Long term insurance business liabilities and margins 25 Form 15 Liabilities (other than long term insurance business) 29 Form 16 Profit and loss account (non-technical account) 30 Form 17 Analysis of derivative contracts 31 Form 18 With-profits insurance capital component for the fund 34 Form 19 Realistic balance sheet 35 General Insurance Business: Revenue Account and Additional Information Form 20A Summary of business carried on 37 Form 20 Technical account (excluding equalisation provisions) 40 Form 24 Underwriting year accounting: Analysis of premiums, claims and 47 expenses Form 25 Underwriting year accounting: Analysis of technical provisions 54 Long Term Insurance Business: Revenue Account and Additional Information Form 40 Revenue account 61 Form 41 Analysis of premiums 65 Form 42 Analysis of claims 69 Form 43 Analysis of expenses 73 Form 44 Linked funds balance sheet 77 Form 45 Revenue account for internal linked funds 78 Form 46 Summary of new business 79 Form 47 Analysis of new business 80 Form 48 Assets not held to match linked liabilities 84 Form 49 Fixed and variable interest assets 88 Form 50 Summary of mathematical reserves 92 Form 51 Valuation summary of non-linked contracts (other than 96 accumulating with-profits contracts) Form 52 Valuation summary of accumulating with-profits contracts 116 Form 53 Valuation summary of property linked contracts 121 Form 54 Valuation summary of index linked contracts 135 Form 55 Unit prices for internal linked funds 141 Form 57 Analysis of valuation interest rate 142 Form 58 Distribution of surplus 145 Form 59A/B With-profits payouts on maturity / surrender 149 Form 60 Long-term insurance capital requirement 151 Supplementary notes to the return 152 Additional information on reinsurance business 164 Additional information on derivative contracts 169

Additional information on controllers 170 Abstract of the Valuation Report 171 Abstract of the Realistic Report 182 Statement of information on the with-profits actuary 190 Directors' Certificate 191 Auditor's Report 192

Form 1 Statement of solvency - general insurance business Global business Adjusted solo solvency calculation Company GL/ registration UK/ day month year Units number CM R1 38921 GL 31 12 2014 000 As at end of this financial year As at end of the previous year 1 2 Capital resources Capital resources arising outside the long-term insurance fund 11 563888 476113 Capital resources allocated towards long-term insurance business arising outside the long-term insurance fund Capital resources available to cover general insurance business capital resources requirement (11-12) 12 560986 471938 13 2902 4175 Guarantee fund Guarantee fund requirement 21 2902 3146 Excess (deficiency) of available capital resources to cover guarantee fund requirement 22 1029 Minimum capital requirement (MCR) General insurance capital requirement 31 176 71 Base capital resources requirement 33 2902 3146 Individual minimum capital requirement 34 2902 3146 Capital requirements of regulated related undertakings 35 Minimum capital requirement (34+35) 36 2902 3146 Excess (deficiency) of available capital resources to cover 50% of MCR 37 1451 2602 Excess (deficiency) of available capital resources to cover 75% of MCR 38 726 1816 Capital resources requirement (CRR) Capital resources requirement 41 2902 3146 Excess (deficiency) of available capital resources to cover general insurance business CRR (13-41) 42 1029 Contingent liabilities Quantifiable contingent liabilities in respect of other than long-term insurance business as shown in a supplementary note to Form 15 51 1

Form 2 Statement of solvency - long-term insurance business Global business Adjusted solo solvency calculation Company GL/ registration UK/ day month year Units number CM R2 38921 GL 31 12 2014 000 As at end of this financial year As at end of the previous year 1 2 Capital resources Capital resources arising within the long-term insurance fund 11 1700638 1832372 Capital resources allocated towards long-term insurance business arising outside the long-term insurance fund Capital resources available to cover long-term insurance business capital resources requirement (11+12) 12 560986 471938 13 2261624 2304310 Guarantee fund Guarantee fund requirement 21 145963 113817 Excess (deficiency) of available capital resources to cover guarantee fund requirement 22 2115661 2190493 Minimum capital requirement (MCR) Long-term insurance capital requirement 31 437899 341451 Resilience capital requirement 32 Base capital resources requirement 33 2902 3146 Individual minimum capital requirement 34 437899 341451 Capital requirements of regulated related undertakings 35 81013 Minimum capital requirement (34+35) 36 518912 341451 Excess (deficiency) of available capital resources to cover 50% of MCR 37 2002168 2133585 Excess (deficiency) of available capital resources to cover 75% of MCR 38 1872440 2048222 Enhanced capital requirement With-profits insurance capital component 39 1073931 1140103 Enhanced capital requirement 40 1592843 1481554 Capital resources requirement (CRR) Capital resources requirement (greater of 36 and 40) 41 1592843 1481554 Excess (deficiency) of available capital resources to cover long-term insurance business CRR (13-41) 42 668781 822756 Contingent liabilities Quantifiable contingent liabilities in respect of long-term insurance business as shown in a supplementary note to Form 14 51 2

Components of capital resources Form 3 (Sheet 1) Global business Company GL/ registration UK/ day month year Units number CM R3 38921 GL 31 12 2014 000 Core tier one capital General Long-term Total as at Total as at insurance insurance the end of the end of business business this financial the previous year year 1 2 3 4 Permanent share capital 11 430578 430578 430578 Profit and loss account and other reserves 12 2902 790205 793107 638875 Share premium account 13 16221 16221 16221 Positive valuation differences 14 1060240 1060240 1120517 Fund for future appropriations Core tier one capital in related undertakings 15 131543 131543 144814 16 (45653) (45653) Core tier one capital (sum of 11 to 16) 19 2902 2383134 2386036 2351005 Tier one waivers Unpaid share capital / unpaid initial funds and calls for supplementary contributions Implicit Items 22 Tier one waivers in related undertakings 23 21 Total tier one waivers as restricted (21+22+23) 24 Other tier one capital Perpetual non-cumulative preference shares as restricted Perpetual non-cumulative preference shares in related undertakings Innovative tier one capital as restricted Innovative tier one capital in related undertakings 25 26 27 28 Total tier one capital before deductions (19+24+25+26+27+28) Investments in own shares Intangible assets Amounts deducted from technical provisions for discounting Other negative valuation differences Deductions in related undertakings Deductions from tier one (32 to 36) Total tier one capital after deductions (31-37) 31 2902 2383134 2386036 2351005 32 33 35374 35374 42140 34 35 36 50720 50720 37 86094 86094 42140 39 2902 2297040 2299942 2308865 3

Components of capital resources Form 3 (Sheet 2) Global business Tier two capital Company GL/ registration UK/ day month year Units number CM R3 38921 GL 31 12 2014 000 General Long-term Total as at Total as at insurance insurance the end of the end of business business this financial the previous year year 1 2 3 4 Implicit items, (tier two waivers and amounts excluded from line 22) Perpetual non-cumulative preference shares excluded from line 25 Innovative tier one capital excluded from line 27 Tier two waivers, innovative tier one capital and perpetual noncumulative preference shares treated as tier two capital (41 to 43) Perpetual cumulative preference shares Perpetual subordinated debt and securities 41 42 43 44 45 46 Upper tier two capital in related undertakings 47 Upper tier two capital (44 to 47) 49 Fixed term preference shares 51 Other tier two instruments 52 Lower tier two capital in related undertakings 53 Lower tier two capital (51+52+53) 59 Total tier two capital before restrictions (49+59) 61 Excess tier two capital 62 Further excess lower tier two capital Total tier two capital after restrictions, before deductions (61-62-63) 63 69 4

Components of capital resources Form 3 (Sheet 3) Global business Total capital resources Company GL/ registration UK/ day month year Units number CM R3 38921 GL 31 12 2014 000 General Long-term Total as at Total as at insurance insurance the end of the end of business business this financial the previous year year 1 2 3 4 Positive adjustments for regulated non-insurance related undertakings Total capital resources before deductions (39+69+71) Inadmissible assets other than intangibles and own shares Assets in excess of market risk and counterparty limits Deductions for related ancillary services undertakings Deductions for regulated non-insurance related undertakings Deductions of ineligible surplus capital Total capital resources after deductions (72-73-74-75-76-77) 71 72 2902 2297040 2299942 2308865 73 35416 35416 380 74 75 76 77 79 2902 2261624 2264526 2308485 Available capital resources for GENPRU/INSPRU tests Available capital resources for guarantee fund requirement Available capital resources for 50% MCR requirement Available capital resources for 75% MCR requirement 81 2902 2261624 2264526 2308485 82 2902 2261624 2264526 2308485 83 2902 2261624 2264526 2308485 Financial engineering adjustments Implicit items Financial reinsurance - ceded Financial reinsurance - accepted Outstanding contingent loans Any other charges on future profits Sum of financial engineering adjustments (91+92-93+94+95) 91 92 93 94 95 96 5

Form 11 Calculation of general insurance capital requirement - premiums amount and brought forward amount Global business General insurance business Company GL/ registration UK/ day month year Units number CM R11 38921 GL 31 12 2014 000 Gross premiums written Premiums taxes and levies (included in line 11) Premiums written net of taxes and levies (11-12) Premiums for classes 11, 12 or 13 (included in line 13) Premiums for "actuarial health insurance" (included in line 13) Sub-total A (13 + 1/2 14-2/3 15) Gross premiums earned Premium taxes and levies (included in line 21) Premiums earned net of taxes and levies (21-22) Premiums for classes 11, 12 or 13 (included in line 23) Premiums for "actuarial health insurance" (included in line 23) Sub-total H (23 + 1/2 24-2/3 25) Sub-total I (higher of sub-total A and sub-total H) Adjusted sub-total I if financial year is not a 12 month period to produce an annual figure Division of gross adjusted premiums amount sub-total I (or adjusted sub-total I if appropriate) x 0.18 Excess (if any) over 61.3M EURO x 0.02 11 12 13 14 15 16 21 22 23 24 25 26 30 31 32 33 This financial year Previous year 1 2 Sub-total J (32-33) Claims paid in period of 3 financial years Claims outstanding carried forward at the end of the 3 year period Claims outstanding brought forward at the beginning of the 3 year period Sub-total C (41+42+43-44-45) For insurance business accounted for on an underwriting year basis For insurance business accounted for on an accident year basis For insurance business accounted for on an underwriting year basis For insurance business accounted for on an accident year basis Amounts recoverable from reinsurers in respect of claims included in Sub-total C Sub-total D (46-47) Reinsurance Ratio (Sub-total D /sub-total C or, if more, 0.50 or, if less, 1.00) Premiums amount (Sub-total J x reinsurance ratio) Provision for claims outstanding (before discounting and net of reinsurance Provision for claims outstanding (before discounting and gross of reinsurance) if both 51.1 and 51.2 are zero, otherwise zero Brought forward amount (See instruction 4) Greater of lines 50 and 53 34 41 1261 1361 42 7170 3912 43 44 4376 5459 45 46 4055 (186) 47 7170 1 48 (3115) (187) 49 0.50 1.00 50 51 3912 52 53 71 54 71 6

Form 11 Calculation of general insurance capital requirement - premiums amount and brought forward amount Global business Long term insurance business Company GL/ registration UK/ day month year Units number CM R11 38921 GL 31 12 2014 000 Gross premiums written Premiums taxes and levies (included in line 11) Premiums written net of taxes and levies (11-12) Premiums for classes 11, 12 or 13 (included in line 13) Premiums for "actuarial health insurance" (included in line 13) Sub-total A (13 + 1/2 14-2/3 15) Gross premiums earned Premium taxes and levies (included in line 21) Premiums earned net of taxes and levies (21-22) Premiums for classes 11, 12 or 13 (included in line 23) Premiums for "actuarial health insurance" (included in line 23) Sub-total H (23 + 1/2 24-2/3 25) Sub-total I (higher of sub-total A and sub-total H) Adjusted sub-total I if financial year is not a 12 month period to produce an annual figure Division of gross adjusted premiums amount sub-total I (or adjusted sub-total I if appropriate) Sub-total J (32-33) Claims paid in period of 3 financial years Claims outstanding carried forward at the end of the 3 year period Claims outstanding brought forward at the beginning of the 3 year period Sub-total C (41+42+43-44-45) x 0.18 Excess (if any) over 61.3M EURO x 0.02 For insurance business accounted for on an underwriting year basis For insurance business accounted for on an accident year basis For insurance business accounted for on an underwriting year basis For insurance business accounted for on an accident year basis Amounts recoverable from reinsurers in respect of claims included in Sub-total C Sub-total D (46-47) Reinsurance Ratio (Sub-total D /sub-total C or, if more, 0.50 or, if less, 1.00) Premiums amount (Sub-total J x reinsurance ratio) Provision for claims outstanding (before discounting and net of reinsurance Provision for claims outstanding (before discounting and gross of reinsurance) if both 51.1 and 51.2 are zero, otherwise zero Brought forward amount (See instruction 4) Greater of lines 50 and 53 This financial year Previous year 1 2 11 673 885 12 13 673 885 14 15 16 673 885 21 673 885 22 23 673 885 24 25 26 673 885 30 673 885 31 673 885 32 121 159 33 34 121 159 41 23349 23588 42 57020 57200 43 44 37657 41028 45 46 42712 39760 47 17713 15633 48 24999 24126 49 0.59 0.61 50 71 97 51 36507 36854 52 53 2206 2227 54 2206 2227 7

Form 12 Calculation of general insurance capital requirement - claims amount and result Global business General insurance business Company GL/ registration UK/ day month year Units number CM R12 38921 GL 31 12 2014 000 Reference period (No. of months) See INSPRU 1.1.63R Claims paid in reference period This financial year Previous year 1 2 11 36 36 21 1261 1361 Claims outstanding carried forward at the end of the reference period Claims outstanding brought forward at the beginning of the reference period For insurance business accounted for on an underwriting year basis For insurance business accounted for on an accident year basis For insurance business accounted for on an underwriting year basis For insurance business accounted for on an accident year basis 22 7170 3912 23 24 4376 5459 25 Claims incurred in reference period (21+22+23-24-25) Claims incurred for classes 11, 12 or 13 (included in 26) Claims incurred for "actuarial health insurance" (included in 26) Sub-total E (26 +1/2 27-2/3 28) Sub-total F - Conversion of sub-total E to annual figure (multiply by 12 and divide by number of months in the reference period) 26 4055 (186) 27 28 29 4055 (186) 31 1352 (62) Division of sub-total F (gross adjusted claims amount) Sub-total G (32-33) x 0.26 Excess (if any) over 42.9M EURO x 0.03 32 351 (16) 33 39 351 (16) Claims amount Sub-total G x reinsurance ratio (11.49) Higher of premiums amount and brought forward amount (11.54) General insurance capital requirement (higher of lines 41 and 42) 41 176 (16) 42 71 43 176 71 8

Form 12 Calculation of general insurance capital requirement - claims amount and result Global business Long term insurance business Company GL/ registration UK/ day month year Units number CM R12 38921 GL 31 12 2014 000 Reference period (No. of months) See INSPRU 1.1.63R Claims paid in reference period This financial year Previous year 1 2 11 36 36 21 23349 23588 Claims outstanding carried forward at the end of the reference period Claims outstanding brought forward at the beginning of the reference period For insurance business accounted for on an underwriting year basis For insurance business accounted for on an accident year basis For insurance business accounted for on an underwriting year basis For insurance business accounted for on an accident year basis 22 57020 57200 23 24 37657 41028 25 Claims incurred in reference period (21+22+23-24-25) Claims incurred for classes 11, 12 or 13 (included in 26) Claims incurred for "actuarial health insurance" (included in 26) Sub-total E (26 +1/2 27-2/3 28) Sub-total F - Conversion of sub-total E to annual figure (multiply by 12 and divide by number of months in the reference period) 26 42712 39760 27 28 29 42712 39760 31 14237 13253 Division of sub-total F (gross adjusted claims amount) Sub-total G (32-33) x 0.26 Excess (if any) over 42.9M EURO x 0.03 32 3702 3446 33 39 3702 3446 Claims amount Sub-total G x reinsurance ratio (11.49) Higher of premiums amount and brought forward amount (11.54) General insurance capital requirement (higher of lines 41 and 42) 41 2167 2091 42 2206 2227 43 2206 2227 9

Analysis of admissible assets Form 13 (Sheet 1) Global business Category of assets Total other than long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 1 As at end of this financial year As at end of the previous year 1 2 Land and buildings 11 Investments in group undertakings and participating interests UK insurance dependants Other insurance dependants Non-insurance dependants Other group undertakings Participating interests Shares Shares Shares Shares Shares 21 23 25 27 29 Debts and loans Debts and loans Debts and loans Debts and loans Debts and loans 22 24 26 28 30 65070 64639 Other financial investments Equity shares 41 Other shares and other variable yield participations 42 Holdings in collective investment schemes 43 86910 Rights under derivative contracts 44 Fixed interest securities Variable interest securities Approved Approved 45 47 253235 153238 Other Other 46 48 Participation in investment pools 49 Loans secured by mortgages 50 Loans to public or local authorities and nationalised industries or undertakings 51 Loans secured by policies of insurance issued by the company Other loans 53 Bank and approved credit & financial institution deposits More than one month withdrawal Other financial investments 56 Deposits with ceding undertakings 57 Assets held to match linked liabilities One month or less withdrawal Index linked Property linked 52 54 69993 88708 55 58 59 10

Analysis of admissible assets Form 13 (Sheet 2) Global business Category of assets Total other than long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 1 As at end of this financial year As at end of the previous year Reinsurers' share of technical provisions 1 2 Provision for unearned premiums Claims outstanding Provision for unexpired risks Other 60 61 7170 62 63 Debtors and salvage Direct insurance business Salvage and subrogation recoveries Reinsurance Dependants Other Other assets Policyholders Intermediaries Accepted Ceded due in 12 months or less due in more than 12 months due in 12 months or less due in more than 12 months 71 72 95 73 74 75 84 76 41 77 78 1856 429 79 Tangible assets Deposits not subject to time restriction on withdrawal with approved institutions Cash in hand Other assets (particulars to be specified by way of supplementary note) Accrued interest and rent Deferred acquisition costs (general business only) Other prepayments and accrued income 80 81 162964 59077 82 83 84 14 51 85 86 21711 29514 Deductions from the aggregate value of assets 87 Grand total of admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (11 to 86 less 87) 89 582054 482745 11

Analysis of admissible assets Form 13 (Sheet 3) Global business Category of assets Total other than long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 1 As at end of this financial year As at end of the previous year 1 2 Reconciliation to asset values determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting Total admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (as per line 89 above) Admissible assets in excess of market and counterparty limits Inadmissible assets directly held Capital resources requirement deduction of regulated related undertakings Ineligible surplus capital and restricted assets in regulated related insurance undertakings Inadmissible assets of regulated related undertakings Book value of related ancillary services undertakings Other differences in the valuation of assets (other than for assets not valued above) Deferred acquisition costs excluded from line 89 Reinsurers' share of technical provisions excluded from line 89 Other asset adjustments (may be negative) Total assets determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (91 to 101) 91 582054 482745 92 93 94 95 96 97 98 99 100 101 (1856) (429) 102 580198 482316 Amounts included in line 89 attributable to debts due from related insurers, other than those under contracts of insurance or reinsurance 103 65070 64639 12

Analysis of admissible assets Form 13 (Sheet 1) Global business Category of assets Total long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 10 As at end of this financial year As at end of the previous year 1 2 Land and buildings 11 Investments in group undertakings and participating interests UK insurance dependants Other insurance dependants Non-insurance dependants Other group undertakings Participating interests Shares Shares Shares Shares Shares 21 23 25 27 29 66796 8935 8935 Debts and loans Debts and loans Debts and loans Debts and loans Debts and loans 22 24 26 28 30 Other financial investments Equity shares 41 1124715 1195944 Other shares and other variable yield participations 42 Holdings in collective investment schemes 43 16881 13168 Rights under derivative contracts 44 901544 174890 Fixed interest securities Variable interest securities Approved Approved 45 47 619458 54017 403971 30185 Other Other 46 48 8582547 1085665 7373670 467194 Participation in investment pools 49 Loans secured by mortgages 50 Loans to public or local authorities and nationalised industries or undertakings 51 Loans secured by policies of insurance issued by the company Other loans 53 Bank and approved credit & financial institution deposits More than one month withdrawal 52 157 162 54 94483 89287 Other financial investments 56 340994 Deposits with ceding undertakings 57 Assets held to match linked liabilities One month or less withdrawal Index linked Property linked 55 58 59 1972304 2088899 13

Analysis of admissible assets Form 13 (Sheet 2) Global business Category of assets Total long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 10 As at end of this financial year As at end of the previous year Reinsurers' share of technical provisions 1 2 Provision for unearned premiums Claims outstanding Provision for unexpired risks Other 60 61 62 63 Debtors and salvage Direct insurance business Salvage and subrogation recoveries Reinsurance Dependants Other Other assets Policyholders Intermediaries Accepted Ceded due in 12 months or less due in more than 12 months due in 12 months or less due in more than 12 months 71 338 319 72 73 74 195 75 17258 21445 76 77 78 7203 11941 79 Tangible assets Deposits not subject to time restriction on withdrawal with approved institutions Cash in hand Other assets (particulars to be specified by way of supplementary note) Accrued interest and rent Deferred acquisition costs (general business only) Other prepayments and accrued income 80 81 78440 68 82 83 84 176459 164342 85 86 4302 44031 Deductions from the aggregate value of assets 87 Grand total of admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (11 to 86 less 87) 89 14811502 12429640 14

Analysis of admissible assets Form 13 (Sheet 3) Global business Category of assets Total long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 10 As at end of this financial year As at end of the previous year 1 2 Reconciliation to asset values determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting Total admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (as per line 89 above) Admissible assets in excess of market and counterparty limits Inadmissible assets directly held Capital resources requirement deduction of regulated related undertakings Ineligible surplus capital and restricted assets in regulated related insurance undertakings Inadmissible assets of regulated related undertakings Book value of related ancillary services undertakings Other differences in the valuation of assets (other than for assets not valued above) Deferred acquisition costs excluded from line 89 Reinsurers' share of technical provisions excluded from line 89 Other asset adjustments (may be negative) Total assets determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (91 to 101) 91 14811502 12429640 92 93 35723 42520 94 81013 95 71000 96 35067 97 98 25373 99 100 1433929 1356306 101 377429 88572 102 16871036 13917038 Amounts included in line 89 attributable to debts due from related insurers, other than those under contracts of insurance or reinsurance 103 1174 15

Analysis of admissible assets Form 13 (Sheet 1) Global business Category of assets With Profits Fund Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 11 As at end of this financial year As at end of the previous year Land and buildings 11 Investments in group undertakings and participating interests Shares 21 UK insurance dependants Debts and loans 22 Shares 23 Other insurance dependants Debts and loans 24 Shares 25 Non-insurance dependants Debts and loans 26 Shares 27 Other group undertakings Debts and loans 28 Shares 29 Participating interests Debts and loans 30 Other financial investments 1 2 Equity shares 41 1011601 1106040 Other shares and other variable yield participations 42 Holdings in collective investment schemes 43 16859 13168 Rights under derivative contracts 44 44879 20271 Fixed interest securities Variable interest securities Approved Approved 45 47 123446 227028 Other Other 46 48 1096259 347 999614 1096 Participation in investment pools 49 Loans secured by mortgages 50 Loans to public or local authorities and nationalised industries or undertakings 51 Loans secured by policies of insurance issued by the company Other loans 53 Bank and approved credit & financial institution deposits More than one month withdrawal Other financial investments 56 Deposits with ceding undertakings 57 Assets held to match linked liabilities One month or less withdrawal Index linked Property linked 52 157 162 54 53637 76948 55 58 59 1502676 1552541 16

Analysis of admissible assets Form 13 (Sheet 2) Global business Category of assets With Profits Fund Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 11 As at end of this financial year As at end of the previous year Reinsurers' share of technical provisions 1 2 Provision for unearned premiums Claims outstanding Provision for unexpired risks Other 60 61 62 63 Debtors and salvage Direct insurance business Salvage and subrogation recoveries Reinsurance Dependants Other Other assets Policyholders Intermediaries Accepted Ceded due in 12 months or less due in more than 12 months due in 12 months or less due in more than 12 months 71 338 319 72 73 74 75 76 77 78 191 1723 79 Tangible assets Deposits not subject to time restriction on withdrawal with approved institutions Cash in hand Other assets (particulars to be specified by way of supplementary note) Accrued interest and rent Deferred acquisition costs (general business only) Other prepayments and accrued income 80 81 10516 82 83 84 23638 24670 85 86 2 43 Deductions from the aggregate value of assets 87 Grand total of admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (11 to 86 less 87) 89 3884546 4023623 17

Analysis of admissible assets Form 13 (Sheet 3) Global business Category of assets With Profits Fund Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 11 As at end of this financial year As at end of the previous year 1 2 Reconciliation to asset values determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting Total admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (as per line 89 above) Admissible assets in excess of market and counterparty limits Inadmissible assets directly held Capital resources requirement deduction of regulated related undertakings Ineligible surplus capital and restricted assets in regulated related insurance undertakings Inadmissible assets of regulated related undertakings Book value of related ancillary services undertakings Other differences in the valuation of assets (other than for assets not valued above) Deferred acquisition costs excluded from line 89 Reinsurers' share of technical provisions excluded from line 89 Other asset adjustments (may be negative) Total assets determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (91 to 101) 91 3884546 4023623 92 93 349 380 94 95 96 97 98 99 100 5314 5230 101 (312) 5979 102 3889897 4035212 Amounts included in line 89 attributable to debts due from related insurers, other than those under contracts of insurance or reinsurance 103 1174 18

Analysis of admissible assets Form 13 (Sheet 1) Global business Category of assets Non-Profit Fund Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 12 As at end of this financial year As at end of the previous year 1 2 Land and buildings 11 Investments in group undertakings and participating interests UK insurance dependants Other insurance dependants Non-insurance dependants Other group undertakings Participating interests Shares Shares Shares Shares Shares 21 23 25 27 29 66796 8935 8935 Debts and loans Debts and loans Debts and loans Debts and loans Debts and loans 22 24 26 28 30 Other financial investments Equity shares 41 113114 89904 Other shares and other variable yield participations 42 Holdings in collective investment schemes 43 22 Rights under derivative contracts 44 856665 154619 Fixed interest securities Variable interest securities Approved Approved 45 47 495383 54017 175789 30185 Other Other 46 48 7478270 1085318 6365058 466098 Participation in investment pools 49 Loans secured by mortgages 50 Loans to public or local authorities and nationalised industries or undertakings 51 Loans secured by policies of insurance issued by the company Other loans 53 Bank and approved credit & financial institution deposits More than one month withdrawal 52 54 40598 12339 Other financial investments 56 340994 Deposits with ceding undertakings 57 Assets held to match linked liabilities One month or less withdrawal Index linked Property linked 55 58 59 469628 536358 19

Analysis of admissible assets Form 13 (Sheet 2) Global business Category of assets Non-Profit Fund Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 12 As at end of this financial year As at end of the previous year Reinsurers' share of technical provisions 1 2 Provision for unearned premiums Claims outstanding Provision for unexpired risks Other 60 61 62 63 Debtors and salvage Direct insurance business Salvage and subrogation recoveries Reinsurance Dependants Other Other assets Policyholders Intermediaries Accepted Ceded due in 12 months or less due in more than 12 months due in 12 months or less due in more than 12 months 71 72 73 74 195 75 17222 21365 76 77 78 7016 10018 79 Tangible assets Deposits not subject to time restriction on withdrawal with approved institutions Cash in hand Other assets (particulars to be specified by way of supplementary note) Accrued interest and rent Deferred acquisition costs (general business only) Other prepayments and accrued income 80 81 67924 82 83 84 152674 139502 85 86 4300 43988 Deductions from the aggregate value of assets 87 Grand total of admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (11 to 86 less 87) 89 10917882 8395347 20

Analysis of admissible assets Form 13 (Sheet 3) Global business Category of assets Non-Profit Fund Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 12 As at end of this financial year As at end of the previous year 1 2 Reconciliation to asset values determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting Total admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (as per line 89 above) Admissible assets in excess of market and counterparty limits Inadmissible assets directly held Capital resources requirement deduction of regulated related undertakings Ineligible surplus capital and restricted assets in regulated related insurance undertakings Inadmissible assets of regulated related undertakings Book value of related ancillary services undertakings Other differences in the valuation of assets (other than for assets not valued above) Deferred acquisition costs excluded from line 89 Reinsurers' share of technical provisions excluded from line 89 Other asset adjustments (may be negative) Total assets determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (91 to 101) 91 10917882 8395347 92 93 35374 42140 94 81013 95 71000 96 35067 97 98 25373 99 100 1424291 1346933 101 377741 82593 102 12967741 9867013 Amounts included in line 89 attributable to debts due from related insurers, other than those under contracts of insurance or reinsurance 103 21

Analysis of admissible assets Form 13 (Sheet 1) Global business Category of assets Permanent Health Fund Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 13 As at end of this financial year As at end of the previous year 1 2 Land and buildings 11 Investments in group undertakings and participating interests Shares 21 UK insurance dependants Debts and loans 22 Shares 23 Other insurance dependants Debts and loans 24 Shares 25 Non-insurance dependants Debts and loans 26 Shares 27 Other group undertakings Debts and loans 28 Shares 29 Participating interests Debts and loans 30 Other financial investments Equity shares 41 Other shares and other variable yield participations 42 Holdings in collective investment schemes 43 Rights under derivative contracts 44 Approved 45 629 1154 Fixed interest securities Other 46 8018 8998 Approved 47 Variable interest securities Other 48 Participation in investment pools 49 Loans secured by mortgages 50 Loans to public or local authorities and nationalised industries or undertakings 51 Loans secured by policies of insurance issued by the company Other loans 53 Bank and approved credit & financial institution deposits More than one month withdrawal Other financial investments 56 Deposits with ceding undertakings 57 Assets held to match linked liabilities One month or less withdrawal Index linked Property linked 52 54 248 55 58 59 22

Analysis of admissible assets Form 13 (Sheet 2) Global business Category of assets Permanent Health Fund Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 13 As at end of this financial year As at end of the previous year Reinsurers' share of technical provisions 1 2 Provision for unearned premiums Claims outstanding Provision for unexpired risks Other 60 61 62 63 Debtors and salvage Direct insurance business Salvage and subrogation recoveries Reinsurance Dependants Other Other assets Policyholders Intermediaries Accepted Ceded due in 12 months or less due in more than 12 months due in 12 months or less due in more than 12 months 71 72 73 74 75 36 80 76 77 78 (4) 200 79 Tangible assets Deposits not subject to time restriction on withdrawal with approved institutions Cash in hand Other assets (particulars to be specified by way of supplementary note) Accrued interest and rent Deferred acquisition costs (general business only) Other prepayments and accrued income 80 81 68 82 83 84 147 170 85 86 Deductions from the aggregate value of assets 87 Grand total of admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (11 to 86 less 87) 89 9074 10670 23

Analysis of admissible assets Form 13 (Sheet 3) Global business Category of assets Permanent Health Fund Company GL/ Category registration UK/ day month year Units of number CM assets R13 38921 GL 31 12 2014 000 13 As at end of this financial year As at end of the previous year 1 2 Reconciliation to asset values determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting Total admissible assets after deduction of admissible assets in excess of market risk and counterparty limits (as per line 89 above) Admissible assets in excess of market and counterparty limits Inadmissible assets directly held Capital resources requirement deduction of regulated related undertakings Ineligible surplus capital and restricted assets in regulated related insurance undertakings Inadmissible assets of regulated related undertakings Book value of related ancillary services undertakings Other differences in the valuation of assets (other than for assets not valued above) Deferred acquisition costs excluded from line 89 Reinsurers' share of technical provisions excluded from line 89 Other asset adjustments (may be negative) Total assets determined in accordance with the insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (91 to 101) 91 9074 10670 92 93 94 95 96 97 98 99 100 4324 4143 101 102 13398 14813 Amounts included in line 89 attributable to debts due from related insurers, other than those under contracts of insurance or reinsurance 103 24

Long term insurance business liabilities and margins Form 14 Global business Total business Summary Units 000 As at end of As at end of this financial the previous year year 1 2 Mathematical reserves, after distribution of surplus 11 12301531 9907217 Cash bonuses which had not been paid to policyholders prior to end of the financial year Balance of surplus/(valuation deficit) 13 385374 425601 Long term insurance business fund carried forward (11 to 13) 14 12686905 10332818 Claims outstanding Provisions 12 Gross 15 24004 26770 Reinsurers' share 16 265 295 Net (15-16) 17 23739 26475 Taxation 21 26935 26837 Other risks and charges 22 Deposits received from reinsurers 23 Creditors Debenture loans Direct insurance business 31 2063 1983 Reinsurance accepted 32 22 24 Reinsurance ceded 33 39 83 Secured 34 Unsecured 35 Amounts owed to credit institutions 36 301 16 Creditors Taxation 37 46069 71996 Other 38 791179 562636 Accruals and deferred income 39 Provision for "reasonably foreseeable adverse variations" Total other insurance and non-insurance liabilities (17 to 41) 49 890347 690050 Excess of the value of net admissible assets 51 1234250 1406772 Total liabilities and margins 59 14811502 12429640 41 Amounts included in line 59 attributable to liabilities to related companies, other than those under contracts of insurance or reinsurance Amounts included in line 59 attributable to liabilities in respect of property linked benefits 61 922 1892 62 1969762 2080427 Total liabilities (11+12+49) Increase to liabilities - DAC related 72 71 13191878 10597267 Reinsurers' share of technical provisions 73 1433929 1356306 Other adjustments to liabilities (may be negative) 74 1437670 1209089 Capital and reserves and fund for future appropriations 75 807559 754376 Total liabilities under insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (71 to 75) 76 16871036 13917038 25

Long term insurance business liabilities and margins Form 14 Global business Sub fund With Profits Fund Units 000 As at end of As at end of this financial the previous year year 1 2 Mathematical reserves, after distribution of surplus 11 2554301 2591153 Cash bonuses which had not been paid to policyholders prior to end of the financial year Balance of surplus/(valuation deficit) 13 503 544 Long term insurance business fund carried forward (11 to 13) 14 2554804 2591697 Claims outstanding Provisions 12 Gross 15 15061 15953 Reinsurers' share 16 265 295 Net (15-16) 17 14796 15658 Taxation 21 1644 4156 Other risks and charges 22 Deposits received from reinsurers 23 Creditors Debenture loans Direct insurance business 31 2063 1983 Reinsurance accepted 32 Reinsurance ceded 33 38 82 Secured 34 Unsecured 35 Amounts owed to credit institutions 36 301 Creditors Taxation 37 10480 9204 Other 38 66170 91343 Accruals and deferred income 39 Provision for "reasonably foreseeable adverse variations" Total other insurance and non-insurance liabilities (17 to 41) 49 95492 122426 Excess of the value of net admissible assets 51 1234250 1309500 Total liabilities and margins 59 3884546 4023623 41 Amounts included in line 59 attributable to liabilities to related companies, other than those under contracts of insurance or reinsurance Amounts included in line 59 attributable to liabilities in respect of property linked benefits 61 186 62 1501438 1547819 Total liabilities (11+12+49) Increase to liabilities - DAC related 72 71 2649793 2713579 Reinsurers' share of technical provisions 73 5314 5230 Other adjustments to liabilities (may be negative) 74 1083547 1152789 Capital and reserves and fund for future appropriations 75 151243 163614 Total liabilities under insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (71 to 75) 76 3889897 4035212 26

Long term insurance business liabilities and margins Form 14 Global business Sub fund Non-Profit Fund Units 000 As at end of As at end of this financial the previous year year 1 2 Mathematical reserves, after distribution of surplus 11 9739642 7308164 Cash bonuses which had not been paid to policyholders prior to end of the financial year Balance of surplus/(valuation deficit) 13 383765 422927 Long term insurance business fund carried forward (11 to 13) 14 10123407 7731091 Claims outstanding Provisions 12 Gross 15 8943 10817 Reinsurers' share 16 Net (15-16) 17 8943 10817 Taxation 21 25291 22681 Other risks and charges 22 Deposits received from reinsurers 23 Creditors Debenture loans Direct insurance business 31 Reinsurance accepted 32 22 24 Reinsurance ceded 33 Secured 34 Unsecured 35 Amounts owed to credit institutions 36 16 Creditors Taxation 37 35487 62676 Other 38 724732 470770 Accruals and deferred income 39 Provision for "reasonably foreseeable adverse variations" Total other insurance and non-insurance liabilities (17 to 41) 49 794475 566984 Excess of the value of net admissible assets 51 97272 Total liabilities and margins 59 10917882 8395347 41 Amounts included in line 59 attributable to liabilities to related companies, other than those under contracts of insurance or reinsurance Amounts included in line 59 attributable to liabilities in respect of property linked benefits 61 737 1884 62 468324 532608 Total liabilities (11+12+49) Increase to liabilities - DAC related 72 71 10534117 7875148 Reinsurers' share of technical provisions 73 1424291 1346933 Other adjustments to liabilities (may be negative) 74 354123 56300 Capital and reserves and fund for future appropriations 75 655210 588632 Total liabilities under insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (71 to 75) 76 12967741 9867013 27

Long term insurance business liabilities and margins Form 14 Global business Sub fund Permanent Health Fund Units 000 As at end of As at end of this financial the previous year year 1 2 Mathematical reserves, after distribution of surplus 11 7588 7900 Cash bonuses which had not been paid to policyholders prior to end of the financial year Balance of surplus/(valuation deficit) 13 1106 2130 Long term insurance business fund carried forward (11 to 13) 14 8694 10030 Claims outstanding Provisions 12 Gross 15 Reinsurers' share 16 Net (15-16) 17 Taxation 21 Other risks and charges 22 Deposits received from reinsurers 23 Creditors Debenture loans Direct insurance business 31 Reinsurance accepted 32 Reinsurance ceded 33 1 1 Secured 34 Unsecured 35 Amounts owed to credit institutions 36 Creditors Taxation 37 102 116 Other 38 277 523 Accruals and deferred income 39 Provision for "reasonably foreseeable adverse variations" Total other insurance and non-insurance liabilities (17 to 41) 49 380 640 Excess of the value of net admissible assets 51 Total liabilities and margins 59 9074 10670 41 Amounts included in line 59 attributable to liabilities to related companies, other than those under contracts of insurance or reinsurance Amounts included in line 59 attributable to liabilities in respect of property linked benefits 61 (1) 8 62 Total liabilities (11+12+49) Increase to liabilities - DAC related 72 71 7968 8540 Reinsurers' share of technical provisions 73 4324 4143 Other adjustments to liabilities (may be negative) 74 Capital and reserves and fund for future appropriations 75 1106 2130 Total liabilities under insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (71 to 75) 76 13398 14813 28

Form 15 Liabilities (other than long term insurance business) Global business Company GL/ registration UK/ day month year Units number CM R15 38921 GL 31 12 2014 000 Technical provisions (gross amount) As at end of As at end of this financial the previous year year 1 2 Provisions for unearned premiums 11 Claims outstanding 12 7170 3912 Provision for unexpired risks 13 Equalisation provisions Credit business 14 Other than credit business 15 Other technical provisions 16 Total gross technical provisions (11 to 16) 19 7170 3912 Provisions and creditors Provisions Taxation 21 Other risks and charges 22 Deposits received from reinsurers 31 Creditors Debenture loans Direct insurance business 41 93 Reinsurance accepted 42 91 Reinsurance ceded 43 Secured 44 Unsecured 45 Amounts owed to credit institutions 46 Creditors Taxation 47 470 Foreseeable dividend 48 Other 49 10526 2536 Accruals and deferred income 51 Total (19 to 51) 59 18166 6632 Provision for "reasonably foreseeable adverse variations" 61 Cumulative preference share capital 62 Subordinated loan capital 63 Total (59 to 63) 69 18166 6632 Amounts included in line 69 attributable to liabilities to related insurers, other than those under contracts of insurance or reinsurance 71 33 Amounts deducted from technical provisions for discounting 82 Other adjustments (may be negative) 83 (1856) (429) Capital and reserves 84 563888 476113 Total liabilities under insurance accounts rules or international accounting standards as applicable to the firm for the purpose of its external financial reporting (69-82+83+84) 85 580198 482316 29

Form 16 Profit and loss account (non-technical account) Global business Company GL/ registration UK/ day month year Units number CM R16 38921 GL 31 12 2014 000 This financial year Previous year 1 2 Transfer (to)/from the general insurance business technical account From Form 20 11 (6833) (663) Equalisation provisions 12 Transfer from the long term insurance business revenue account Income 13 170642 325017 14 1551 667 Value re-adjustments on Investment income 15 77 investments Gains on the realisation of investments Investment management charges, including interest 16 460 17 556 13 Value re-adjustments on Investment charges 18 789 investments Loss on the realisation of investments Allocated investment return transferred to the general insurance business technical account Other income and charges (particulars to be specified by way of supplementary note) Profit or loss on ordinary activities before tax (11+12+13+14+15+16-17-18-19-20+21) 19 278 20 21 2386 (2613) 29 166989 322066 Tax on profit or loss on ordinary activities 31 (784) (686) Profit or loss on ordinary activities after tax (29-31) 39 167773 322752 Extraordinary profit or loss (particulars to be specified by way of supplementary note) 41 Tax on extraordinary profit or loss 42 Other taxes not shown under the preceding items 43 Profit or loss for the financial year (39+41-(42+43)) 49 167773 322752 Dividends (paid or foreseeable) 51 80000 88000 Profit or loss retained for the financial year (49-51) 59 87773 234752 30

Form 17 Analysis of derivative contracts Global business Category of assets Total long term insurance business assets Company GL/ Category registration UK/ day month year Units of number CM assets R17 38921 GL 31 12 2014 000 10 Derivative contracts Value as at the end of this financial year Notional amount as at the end of this financial year Futures and contracts for differences In the money options Out of the money options Assets Liabilities Bought / Long Sold / Short 1 2 3 4 11 11612 19673 89050 16264 Interest rates 12 879476 381256 6725067 5243265 Inflation 13 Credit index / basket 14 26 4780 469551 Credit single name 15 Equity stock 17 Land 18 16 25213 25776 28285 238502 Currencies 19 10133 2728 6916 1260204 Mortality 20 Other 21 Swaptions 31 Equity index calls 32 Equity stock calls 33 Equity index puts 34 Equity stock puts 35 Other 36 Swaptions 41 1474 626084 Equity index calls 42 Equity stock calls 43 Equity index puts 44 7747 324995 Equity stock puts 45 Other 46 Total (11 to 46) 51 935682 434213 7944953 7083231 Adjustment for variation margin Total (51 + 52) Fixed-interest securities Equity index 52 (34137) (34257) 53 901545 399956 THE NOTIONAL AMOUNTS IN COLUMNS 3 AND 4 ARE NOT A MEASURE OF EXPOSURE. Please see instructions 11 and 12 to this Form for the meaning of these figures. 31

Form 17 Analysis of derivative contracts Global business Category of assets With Profits Fund Company GL/ Category registration UK/ day month year Units of number CM assets R17 38921 GL 31 12 2014 000 11 Derivative contracts Value as at the end of this financial year Notional amount as at the end of this financial year Futures and contracts for differences In the money options Out of the money options Assets Liabilities Bought / Long Sold / Short 1 2 3 4 11 973 1007 Interest rates 12 36788 34555 144464 537712 Inflation 13 Credit index / basket 14 Credit single name 15 Equity stock 17 Land 18 Currencies 19 Mortality 20 Other 21 Swaptions 16 402 31 Equity index calls 32 Equity stock calls 33 Equity index puts 34 Equity stock puts 35 Other 36 Swaptions 41 709 169776 Equity index calls 42 Equity stock calls 43 Equity index puts 44 7382 324944 Equity stock puts 45 Other 46 Total (11 to 46) 51 46254 35562 314240 862656 Adjustment for variation margin Total (51 + 52) Fixed-interest securities Equity index 52 (1375) (1007) 53 44879 34555 THE NOTIONAL AMOUNTS IN COLUMNS 3 AND 4 ARE NOT A MEASURE OF EXPOSURE. Please see instructions 11 and 12 to this Form for the meaning of these figures. 32

Form 17 Analysis of derivative contracts Global business Category of assets Non-Profit Fund Company GL/ Category registration UK/ day month year Units of number CM assets R17 38921 GL 31 12 2014 000 12 Derivative contracts Value as at the end of this financial year Notional amount as at the end of this financial year Futures and contracts for differences In the money options Out of the money options Assets Liabilities Bought / Long Sold / Short 1 2 3 4 11 10639 18666 89050 16264 Interest rates 12 842688 346701 6580603 4705553 Inflation 13 Credit index / basket 14 26 4780 469551 Credit single name 15 Equity stock 17 Land 18 16 24811 25776 28285 238502 Currencies 19 10133 2728 6916 1260204 Mortality 20 Other 21 Swaptions 31 Equity index calls 32 Equity stock calls 33 Equity index puts 34 Equity stock puts 35 Other 36 Swaptions 41 765 456308 Equity index calls 42 Equity stock calls 43 Equity index puts 44 366 51 Equity stock puts 45 Other 46 Total (11 to 46) 51 889427 398651 7630713 6220574 Adjustment for variation margin Total (51 + 52) Fixed-interest securities Equity index 52 (32762) (33250) 53 856665 365401 THE NOTIONAL AMOUNTS IN COLUMNS 3 AND 4 ARE NOT A MEASURE OF EXPOSURE. Please see instructions 11 and 12 to this Form for the meaning of these figures. 33

Form 18 With-profits insurance capital component for the fund With-profits fund With Profits Fund Units 000 As at end of As at end of this financial year the previous year 1 2 Regulatory excess capital Regulatory value of assets Regulatory value of liabilities Long-term admissible assets of the fund Implicit items allocated to the fund Mathematical reserves in respect of the fund's non-profit insurance contracts Long-term admissible assets of the fund covering the LTICR of the fund's non-profit insurance contracts Long-term admissible assets of the fund covering the RCR of the fund's non-profit insurance contracts Total (11+12-(13+14+15)) Mathematical reserves (after distribution of surplus) in respect of the fund's with-profits insurance contracts Regulatory current liabilities of the fund 11 3884546 4023625 12 13 1626223 1659937 14 21296 22095 15 19 2237027 2341592 21 928078 931216 22 95491 122428 Total (21+22) Long-term insurance capital requirement in respect of the fund's with-profits insurance contracts Resilience capital requirement in respect of the fund's with-profits insurance contracts Sum of regulatory value of liabilities, LTICR and RCR (29+31+32) 29 1023569 1053644 31 37122 37173 32 39 1060690 1090817 Regulatory excess capital (19-39) 49 1176337 1250775 Realistic excess capital Realistic excess capital 51 Excess assets allocated to with-profits insurance business Excess (deficiency) of assets allocated to with-profits insurance business in fund (49-51) Face amount of capital instruments attributed to the fund and included in capital resources (unstressed) Realistic amount of capital instruments attributed to the fund and included in capital resources (stressed) Present value of future shareholder transfers arising from distribution of surplus Present value of other future internal transfers not already taken into account With-profits insurance capital component for fund (if 62 exceeds 63, greater of 61+62-63-64-65 and zero, else greater of 61-64-65 and zero) 61 1176337 1250775 62 63 64 102406 110672 65 66 1073931 1140103 34

Form 19 Realistic balance sheet (Sheet 1) With-profits fund With Profits Fund Units 000 Realistic value of assets available to the fund Regulatory value of assets Implicit items allocated to the fund Value of shares in subsidiaries held in fund (regulatory) Excess admissible assets Present value of future profits (or losses) on non-profit insurance contracts written in the fund Value of derivatives and quasi-derivatives not already reflected in lines 11 to 22 Value of shares in subsidiaries held in fund (realistic) Prepayments made from the fund Realistic value of assets of fund (11+21+22+23+24+25-(12+13)) Support arrangement assets Assets available to the fund (26+27) As at end of As at end of this financial year the previous year 1 2 11 2237027 2341592 12 13 21 22 40840 42949 23 24 25 26 2277867 2384541 27 29 2277867 2384541 Realistic value of liabilities of fund With-profits benefit reserve Future policy related liabilities Past miscellaneous surplus attributed to with-profits benefits reserve Past miscellaneous deficit attributed to with-profits benefits reserve Planned enhancements to with-profits benefits reserve Planned deductions for the costs of guarantees, options and smoothing from with-profits benefits reserve Planned deductions for other costs deemed chargeable to with-profits benefits reserve Future costs of contractual guarantees (other than financial options) Future costs of non-contractual commitments Future costs of financial options Future costs of smoothing (possibly negative) Financing costs Any other liabilities related to regulatory duty to treat customers fairly Other long-term insurance liabilities Total (32+34+41+42+43+44+45+46+47-(33+35+36)) 31 1557279 1527889 32 264277 328134 33 34 302850 340003 35 36 41 42 43 44 45 46 47 57970 66087 49 625097 734224 Realistic current liabilities of the fund 51 95491 122428 Realistic value of liabilities of fund (31+49+51) 59 2277867 2384541 35

Realistic balance sheet With-profits fund With Profits Fund Units 000 Form 19 (Sheet 2) As at end of As at end of this financial year the previous year 1 2 Realistic excess capital and additional capital available Value of relevant assets before applying the most adverse scenario other than the present value of future profits arising from business outside with-profits funds present value of future profits (or losses) on long-term insurance contracts written outside the fund included in the value of relevant assets before applying most adverse scenario Value of relevant assets before applying the most adverse scenario (62+63) 62 2277867 2384541 63 64 2277867 2384541 Risk capital margin for fund (62-59) 65 Realistic excess capital for fund (26-(59+65)) 66 Realistic excess available capital for fund (29-(59+65)) 67 Working capital for fund (29-59) 68 Working capital ratio for fund (68/29) 69 Other assets potentially available if required to cover the fund's risk capital margin Additional amount potentially available for inclusion in line 62 81 Additional amount potentially available for inclusion in line 63 82 36

Form 20A General insurance business : Summary of business carried on (Sheet 1) Global business Company registration number GL/ UK/ CM R20A 38921 GL day month year units 31 12 2014 000 Category number PRA return general insurance business reporting category Gross Premium written in this financial year Provision for undiscounted gross claims outstanding at the end of this financial year Reported Incurred but not reported Provision for gross unearned premium at the end of this financial year 1 2 3 4 001 Total business 1 2532 4638 002 Total primary (direct) and facultative business 2 1777 3691 003 Total treaty reinsurance accepted business 3 755 947 110 Total primary (direct) and facultative accident and health (category numbers 111 to 114) 4 120 Total primary (direct) and facultative personal lines motor business (category numbers 121 to 123) 5 160 Primary (direct) and facultative household and domestic all risks 6 180 Total primary (direct) and facultative personal lines financial loss (category numbers 181 to 187) 7 220 Total primary (direct) and facultative commercial motor business (category numbers 221 to 223) 8 260 Total primary (direct) and facultative commercial lines property (category numbers 261 to 263) 9 121 102 270 Total primary (direct) and facultative commercial lines liability business (category numbers 271 to 274) 10 1624 3545 280 Total primary (direct) and facultative commercial lines financial loss (category numbers 281 to 284) 11 5 17 330 Total primary (direct) and facultative aviation (category numbers 331 to 333) 12 25 19 340 Total primary (direct) and facultative marine (category numbers 341 to 347) 13 2 8 350 Total primary (direct) and facultative goods in transit 14 400 Miscellaneous primary (direct) and facultative business 15 500 Total non-proportional treaty reinsurance business accepted (category numbers 510 to 590) 16 755 947 600 Total proportional treaty reinsurance business accepted (category numbers 610 to 690) 17 700 Miscellaneous treaty reinsurance accepted business 18 Total (lines 4 to 18) 20 2532 4638 37

Form 20A General insurance business : Summary of business carried on (Sheet 2) Global business Company registration number GL/ UK/ CM day month year units R20A 38921 GL 31 12 2014 000 Category number PRA return general insurance business reporting category Gross Premium written in this financial year Provision for undiscounted gross claims outstanding at the end of this financial year Reported Incurred but not reported Provision for gross unearned premium at the end of this financial year 1 2 3 4 Primary (direct) and facultative personal lines business 111 Medical insurance 21 112 HealthCare cash plans 22 113 Travel 23 114 Personal accident or sickness 24 121 Private motor - comprehensive 25 122 Private motor - non-comprehensive 26 123 Motor cycle 27 160 Household and domestic all risks (equals line 6) 28 181 Assistance 29 182 Creditor 30 183 Extended warranty 31 184 Legal expenses 32 185 Mortgage indemnity 33 186 Pet insurance 34 187 Other personal financial loss 35 Primary (direct) and facultative commercial lines business 221 Fleets 41 222 Commercial vehicles (non-fleet) 42 223 Motor other 43 261 Commercial property 44 262 Consequential loss 45 17 71 263 Contractors or engineering all risks 46 104 31 271 Employers liability 47 5 18 272 Professional indemnity 48 770 389 273 Public and products liability 49 637 856 274 Mixed commercial package 50 212 2282 281 Fidelity and contract guarantee 51 5 17 282 Credit 52 283 Suretyship 53 284 Commercial contingency 54 Primary (direct) and facultative aviation 331 Aviation liability 61 25 19 332 Aviation hull 62 333 Space and satellite 63 38

Form 20A General insurance business : Summary of business carried on (Sheet 3) Global business Company registration number GL/ UK/ CM day month year units R20A 38921 GL 31 12 2014 000 Category number PRA return general insurance business reporting category Gross Premium written in this financial year Provision for undiscounted gross claims outstanding at the end of this financial year Reported Incurred but not reported Provision for gross unearned premium at the end of this financial year 1 2 3 4 Primary (direct) and facultative marine and transport 341 Marine liability 64 342 Marine hull 65 2 8 343 Energy (on and off-shore) 66 344 Protection and indemnity 67 345 Freight demurrage and defence 68 346 War risks 69 347 Yacht 70 350 Total primary (direct) and facultative goods in transit (equals line 14) 71 Primary (direct) and facultative miscellaneous 400 Miscellaneous primary (direct) and facultative business (equals line 15) 72 Non-proportional treaty 510 Non-proportional accident and health 81 520 Non-proportional motor 82 530 Non-proportional aviation 83 540 Non-proportional marine 84 20 37 550 Non-proportional transport 85 560 Non-proportional property 86 570 Non-proportional liability (non-motor) 87 735 910 580 Non-proportional financial lines 88 590 Non-proportional aggregate cover 89 Proportional treaty 610 Proportional accident and health 91 620 Proportional motor 92 630 Proportional aviation 93 640 Proportional marine 94 650 Proportional transport 95 660 Proportional property 96 670 Proportional liability (non-motor) 97 680 Proportional financial lines 98 690 Proportional aggregate cover 99 Treaty Reinsurance Miscellaneous Miscellaneous treaty reinsurance accepted business (equals 700 101 line 18) Total (lines 21 to 101) 111 2532 4638 39

Form 20 General insurance business : Technical account (excluding equalisation provisions) Global business Total business Company GL/ Category registration UK/ day month year Units number number CM R20 38921 GL 31 12 2014 000 001 Items to be shown net of reinsurance This financial year Previous year 1 2 Earned premium (21.19.5) 11 Claims incurred (22.17.4) 12 This year's underwriting (accident year accounting) Claims management costs (22.18.4) 13 Adjustment for discounting (22.52.4) 14 Increase in provision for unexpired risks (22.19.4) Other technical income or charges (particulars to be specified by way of supplementary note) 15 16 Net operating expenses (22.42.4) 17 Balance of year's underwriting (11-12-13+14-15+16-17) 19 Earned premium (21.11.5) 21 Claims incurred (22.13.4) 22 Adjustment for prior years' underwriting (accident year accounting) Claims management costs (22.14.4) 23 Adjustment for discounting (22.51.4) 24 Other technical income or charges (particulars to be specified by way of supplementary note) 25 Net operating expenses (22.41.4) 26 Balance (21-22-23+24+25-26) 29 Balance from underwriting year accounting Per Form 24 (24.69.99-99) 31 (6833) (663) Other technical income or charges (particulars to be specified by way of supplementary note) 32 Total 39 (6833) (663) Balance of all years' underwriting (19+29+39) 49 (6833) (663) Allocated investment income 51 Transfer to non-technical account (49+51) 59 (6833) (663) 40

Form 20 General insurance business : Technical account (excluding equalisation provisions) Global business Total primary (direct) and facultative business Company GL/ Category registration UK/ day month year Units number number CM R20 38921 GL 31 12 2014 000 002 Items to be shown net of reinsurance This financial year Previous year 1 2 Earned premium (21.19.5) 11 Claims incurred (22.17.4) 12 This year's underwriting (accident year accounting) Claims management costs (22.18.4) 13 Adjustment for discounting (22.52.4) 14 Increase in provision for unexpired risks (22.19.4) Other technical income or charges (particulars to be specified by way of supplementary note) 15 16 Net operating expenses (22.42.4) 17 Balance of year's underwriting (11-12-13+14-15+16-17) 19 Earned premium (21.11.5) 21 Claims incurred (22.13.4) 22 Adjustment for prior years' underwriting (accident year accounting) Claims management costs (22.14.4) 23 Adjustment for discounting (22.51.4) 24 Other technical income or charges (particulars to be specified by way of supplementary note) 25 Net operating expenses (22.41.4) 26 Balance (21-22-23+24+25-26) 29 Balance from underwriting year accounting Per Form 24 (24.69.99-99) 31 (5535) (459) Other technical income or charges (particulars to be specified by way of supplementary note) 32 Total 39 (5535) (459) Balance of all years' underwriting (19+29+39) 49 (5535) (459) Allocated investment income 51 Transfer to non-technical account (49+51) 59 (5535) (459) 41

Form 20 General insurance business : Technical account (excluding equalisation provisions) Global business Total treaty reinsurance accepted business Company GL/ Category registration UK/ day month year Units number number CM R20 38921 GL 31 12 2014 000 003 Items to be shown net of reinsurance This financial year Previous year 1 2 Earned premium (21.19.5) 11 Claims incurred (22.17.4) 12 This year's underwriting (accident year accounting) Claims management costs (22.18.4) 13 Adjustment for discounting (22.52.4) 14 Increase in provision for unexpired risks (22.19.4) Other technical income or charges (particulars to be specified by way of supplementary note) 15 16 Net operating expenses (22.42.4) 17 Balance of year's underwriting (11-12-13+14-15+16-17) 19 Earned premium (21.11.5) 21 Claims incurred (22.13.4) 22 Adjustment for prior years' underwriting (accident year accounting) Claims management costs (22.14.4) 23 Adjustment for discounting (22.51.4) 24 Other technical income or charges (particulars to be specified by way of supplementary note) 25 Net operating expenses (22.41.4) 26 Balance (21-22-23+24+25-26) 29 Balance from underwriting year accounting Per Form 24 (24.69.99-99) 31 (1298) (204) Other technical income or charges (particulars to be specified by way of supplementary note) 32 Total 39 (1298) (204) Balance of all years' underwriting (19+29+39) 49 (1298) (204) Allocated investment income 51 Transfer to non-technical account (49+51) 59 (1298) (204) 42

Form 20 General insurance business : Technical account (excluding equalisation provisions) Global business Total primary (direct) and facultative commercial lines liability business Company GL/ Category registration UK/ day month year Units number number CM R20 38921 GL 31 12 2014 000 270 Items to be shown net of reinsurance This financial year Previous year 1 2 Earned premium (21.19.5) 11 Claims incurred (22.17.4) 12 This year's underwriting (accident year accounting) Claims management costs (22.18.4) 13 Adjustment for discounting (22.52.4) 14 Increase in provision for unexpired risks (22.19.4) Other technical income or charges (particulars to be specified by way of supplementary note) 15 16 Net operating expenses (22.42.4) 17 Balance of year's underwriting (11-12-13+14-15+16-17) 19 Earned premium (21.11.5) 21 Claims incurred (22.13.4) 22 Adjustment for prior years' underwriting (accident year accounting) Claims management costs (22.14.4) 23 Adjustment for discounting (22.51.4) 24 Other technical income or charges (particulars to be specified by way of supplementary note) 25 Net operating expenses (22.41.4) 26 Balance (21-22-23+24+25-26) 29 Balance from underwriting year accounting Per Form 24 (24.69.99-99) 31 (5288) (296) Other technical income or charges (particulars to be specified by way of supplementary note) 32 Total 39 (5288) (296) Balance of all years' underwriting (19+29+39) 49 (5288) (296) Allocated investment income 51 Transfer to non-technical account (49+51) 59 (5288) (296) 43

Form 20 General insurance business : Technical account (excluding equalisation provisions) Global business Balance of all primary (direct) and facultative business Company GL/ Category registration UK/ day month year Units number number CM R20 38921 GL 31 12 2014 000 409 Items to be shown net of reinsurance This financial year Previous year 1 2 Earned premium (21.19.5) 11 Claims incurred (22.17.4) 12 This year's underwriting (accident year accounting) Claims management costs (22.18.4) 13 Adjustment for discounting (22.52.4) 14 Increase in provision for unexpired risks (22.19.4) Other technical income or charges (particulars to be specified by way of supplementary note) 15 16 Net operating expenses (22.42.4) 17 Balance of year's underwriting (11-12-13+14-15+16-17) 19 Earned premium (21.11.5) 21 Claims incurred (22.13.4) 22 Adjustment for prior years' underwriting (accident year accounting) Claims management costs (22.14.4) 23 Adjustment for discounting (22.51.4) 24 Other technical income or charges (particulars to be specified by way of supplementary note) 25 Net operating expenses (22.41.4) 26 Balance (21-22-23+24+25-26) 29 Balance from underwriting year accounting Per Form 24 (24.69.99-99) 31 (247) (163) Other technical income or charges (particulars to be specified by way of supplementary note) 32 Total 39 (247) (163) Balance of all years' underwriting (19+29+39) 49 (247) (163) Allocated investment income 51 Transfer to non-technical account (49+51) 59 (247) (163) 44

Form 20 General insurance business : Technical account (excluding equalisation provisions) Global business Total non-proportional treaty reinsurance business accepted Company GL/ Category registration UK/ day month year Units number number CM R20 38921 GL 31 12 2014 000 500 Items to be shown net of reinsurance This financial year Previous year 1 2 Earned premium (21.19.5) 11 Claims incurred (22.17.4) 12 This year's underwriting (accident year accounting) Claims management costs (22.18.4) 13 Adjustment for discounting (22.52.4) 14 Increase in provision for unexpired risks (22.19.4) Other technical income or charges (particulars to be specified by way of supplementary note) 15 16 Net operating expenses (22.42.4) 17 Balance of year's underwriting (11-12-13+14-15+16-17) 19 Earned premium (21.11.5) 21 Claims incurred (22.13.4) 22 Adjustment for prior years' underwriting (accident year accounting) Claims management costs (22.14.4) 23 Adjustment for discounting (22.51.4) 24 Other technical income or charges (particulars to be specified by way of supplementary note) 25 Net operating expenses (22.41.4) 26 Balance (21-22-23+24+25-26) 29 Balance from underwriting year accounting Per Form 24 (24.69.99-99) 31 (1224) (193) Other technical income or charges (particulars to be specified by way of supplementary note) 32 Total 39 (1224) (193) Balance of all years' underwriting (19+29+39) 49 (1224) (193) Allocated investment income 51 Transfer to non-technical account (49+51) 59 (1224) (193) 45

Form 20 General insurance business : Technical account (excluding equalisation provisions) Global business Balance of all treaty reinsurance accepted business Company GL/ Category registration UK/ day month year Units number number CM R20 38921 GL 31 12 2014 000 709 Items to be shown net of reinsurance This financial year Previous year 1 2 Earned premium (21.19.5) 11 Claims incurred (22.17.4) 12 This year's underwriting (accident year accounting) Claims management costs (22.18.4) 13 Adjustment for discounting (22.52.4) 14 Increase in provision for unexpired risks (22.19.4) Other technical income or charges (particulars to be specified by way of supplementary note) 15 16 Net operating expenses (22.42.4) 17 Balance of year's underwriting (11-12-13+14-15+16-17) 19 Earned premium (21.11.5) 21 Claims incurred (22.13.4) 22 Adjustment for prior years' underwriting (accident year accounting) Claims management costs (22.14.4) 23 Adjustment for discounting (22.51.4) 24 Other technical income or charges (particulars to be specified by way of supplementary note) 25 Net operating expenses (22.41.4) 26 Balance (21-22-23+24+25-26) 29 Balance from underwriting year accounting Per Form 24 (24.69.99-99) 31 (74) (11) Other technical income or charges (particulars to be specified by way of supplementary note) 32 Total 39 (74) (11) Balance of all years' underwriting (19+29+39) 49 (74) (11) Allocated investment income 51 Transfer to non-technical account (49+51) 59 (74) (11) 46

47 Form 24 General insurance business (underwriting year accounting) : Analysis of premiums, claims and expenses Global business Total business Company registration number GL/ UK/ CM day month year Units Category number R24 38921 GL 31 12 2014 000 001 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Premiums written Claims paid Gross amount 11 Reinsurers' share 12 10500 10500 Net (11-12) 19 (10500) (10500) Gross amount 21 561 561 Reinsurers' share 22 204 204 Net (21-22) 29 357 357 Claims management costs 39 Commissions 41 Net operating expenses Other acquisition expenses 42 Administrative expenses 43 (112) (112) Reinsurers' commissions and profit participations 44 Payable net (41+42+43-44) 49 (112) (112) Technical provisions Undiscounted 51 3912 3912 Brought forward Adjustment for 52 discounting Undiscounted 53 Carried forward Adjustment for 54 discounting Increase (decrease) in the financial year (53-54-51+52) Balance on each underwriting year (19-29-39-49-59) 59 (3912) (3912) 69 (6833) (6833)

48 Form 24 General insurance business (underwriting year accounting) : Analysis of premiums, claims and expenses Global business Total primary (direct) and facultative business Company registration number GL/ UK/ CM day month year Units Category number R24 38921 GL 31 12 2014 000 002 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Premiums written Claims paid Gross amount 11 Reinsurers' share 12 8008 8008 Net (11-12) 19 (8008) (8008) Gross amount 21 382 382 Reinsurers' share 22 139 139 Net (21-22) 29 243 243 Claims management costs 39 Commissions 41 Net operating expenses Other acquisition expenses 42 Administrative expenses 43 (76) (76) Reinsurers' commissions and profit participations 44 Payable net (41+42+43-44) 49 (76) (76) Technical provisions Undiscounted 51 2640 2640 Brought forward Adjustment for 52 discounting Undiscounted 53 Carried forward Adjustment for 54 discounting Increase (decrease) in the financial year (53-54-51+52) Balance on each underwriting year (19-29-39-49-59) 59 (2640) (2640) 69 (5535) (5535)

49 Form 24 General insurance business (underwriting year accounting) : Analysis of premiums, claims and expenses Global business Total treaty reinsurance accepted business Company registration number GL/ UK/ CM day month year Units Category number R24 38921 GL 31 12 2014 000 003 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Premiums written Claims paid Gross amount 11 Reinsurers' share 12 2492 2492 Net (11-12) 19 (2492) (2492) Gross amount 21 179 179 Reinsurers' share 22 65 65 Net (21-22) 29 114 114 Claims management costs 39 Commissions 41 Net operating expenses Other acquisition expenses 42 Administrative expenses 43 (36) (36) Reinsurers' commissions and profit participations 44 Payable net (41+42+43-44) 49 (36) (36) Technical provisions Undiscounted 51 1272 1272 Brought forward Adjustment for 52 discounting Undiscounted 53 Carried forward Adjustment for 54 discounting Increase (decrease) in the financial year (53-54-51+52) Balance on each underwriting year (19-29-39-49-59) 59 (1272) (1272) 69 (1298) (1298)

50 Form 24 General insurance business (underwriting year accounting) : Analysis of premiums, claims and expenses Global business Total primary (direct) and facultative commercial lines liability business Company registration number GL/ UK/ CM day month year Units Category number R24 38921 GL 31 12 2014 000 270 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Premiums written Claims paid Gross amount 11 Reinsurers' share 12 7536 7536 Net (11-12) 19 (7536) (7536) Gross amount 21 317 317 Reinsurers' share 22 115 115 Net (21-22) 29 202 202 Claims management costs 39 Commissions 41 Net operating expenses Other acquisition expenses 42 Administrative expenses 43 (63) (63) Reinsurers' commissions and profit participations 44 Payable net (41+42+43-44) 49 (63) (63) Technical provisions Undiscounted 51 2387 2387 Brought forward Adjustment for 52 discounting Undiscounted 53 Carried forward Adjustment for 54 discounting Increase (decrease) in the financial year (53-54-51+52) Balance on each underwriting year (19-29-39-49-59) 59 (2387) (2387) 69 (5288) (5288)

51 Form 24 General insurance business (underwriting year accounting) : Analysis of premiums, claims and expenses Global business Balance of all primary (direct) and facultative business Company registration number GL/ UK/ CM day month year Units Category number R24 38921 GL 31 12 2014 000 409 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Premiums written Claims paid Gross amount 11 Reinsurers' share 12 472 472 Net (11-12) 19 (472) (472) Gross amount 21 65 65 Reinsurers' share 22 24 24 Net (21-22) 29 41 41 Claims management costs 39 Commissions 41 Net operating expenses Other acquisition expenses 42 Administrative expenses 43 (13) (13) Reinsurers' commissions and profit participations 44 Payable net (41+42+43-44) 49 (13) (13) Technical provisions Undiscounted 51 253 253 Brought forward Adjustment for 52 discounting Undiscounted 53 Carried forward Adjustment for 54 discounting Increase (decrease) in the financial year (53-54-51+52) Balance on each underwriting year (19-29-39-49-59) 59 (253) (253) 69 (247) (247)

52 Form 24 General insurance business (underwriting year accounting) : Analysis of premiums, claims and expenses Global business Total non-proportional treaty reinsurance business accepted Company registration number GL/ UK/ CM day month year Units Category number R24 38921 GL 31 12 2014 000 500 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Premiums written Claims paid Gross amount 11 Reinsurers' share 12 2409 2409 Net (11-12) 19 (2409) (2409) Gross amount 21 164 164 Reinsurers' share 22 60 60 Net (21-22) 29 104 104 Claims management costs 39 Commissions 41 Net operating expenses Other acquisition expenses 42 Administrative expenses 43 (33) (33) Reinsurers' commissions and profit participations 44 Payable net (41+42+43-44) 49 (33) (33) Technical provisions Undiscounted 51 1256 1256 Brought forward Adjustment for 52 discounting Undiscounted 53 Carried forward Adjustment for 54 discounting Increase (decrease) in the financial year (53-54-51+52) Balance on each underwriting year (19-29-39-49-59) 59 (1256) (1256) 69 (1224) (1224)

53 Form 24 General insurance business (underwriting year accounting) : Analysis of premiums, claims and expenses Global business Balance of all treaty reinsurance accepted business Company registration number GL/ UK/ CM day month year Units Category number R24 38921 GL 31 12 2014 000 709 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Premiums written Claims paid Gross amount 11 Reinsurers' share 12 83 83 Net (11-12) 19 (83) (83) Gross amount 21 15 15 Reinsurers' share 22 5 5 Net (21-22) 29 10 10 Claims management costs 39 Commissions 41 Net operating expenses Other acquisition expenses 42 Administrative expenses 43 (3) (3) Reinsurers' commissions and profit participations 44 Payable net (41+42+43-44) 49 (3) (3) Technical provisions Undiscounted 51 16 16 Brought forward Adjustment for 52 discounting Undiscounted 53 Carried forward Adjustment for 54 discounting Increase (decrease) in the financial year (53-54-51+52) Balance on each underwriting year (19-29-39-49-59) 59 (16) (16) 69 (74) (74)

54 Form 25 General insurance business (underwriting year accounting) : Analysis of technical provisions Global business Total business Company registration number GL/ UK/ CM day month year Units Category number R25 38921 GL 31 12 2014 000 001 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Reported claims outstanding Claims incurred but not reported Gross amount 11 2532 2532 Reinsurers' share 12 7170 7170 Gross amount 13 4638 4638 Reinsurers' share 14 Claims management costs 15 Adjustment for discounting Gross amount 16 Reinsurers' share 17 Claims management costs 18 Allocation to/(from) another risk category of anticipated surplus 19 Balance of the fund 20 Claims outstanding (11-12+13-14+15-16+17-18+19+20) 21 Provision for unearned premiums 22 Provision for unexpired risks 23 Deferred acquisition costs 24 Other technical provisions (particulars to be specified by way of supplementary note) 25 Total (21+22+23-24+25) 29

55 Form 25 General insurance business (underwriting year accounting) : Analysis of technical provisions Global business Total primary (direct) and facultative business Company registration number GL/ UK/ CM day month year Units Category number R25 38921 GL 31 12 2014 000 002 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Reported claims outstanding Claims incurred but not reported Gross amount 11 1777 1777 Reinsurers' share 12 5468 5468 Gross amount 13 3691 3691 Reinsurers' share 14 Claims management costs 15 Adjustment for discounting Gross amount 16 Reinsurers' share 17 Claims management costs 18 Allocation to/(from) another risk category of anticipated surplus 19 Balance of the fund 20 Claims outstanding (11-12+13-14+15-16+17-18+19+20) 21 Provision for unearned premiums 22 Provision for unexpired risks 23 Deferred acquisition costs 24 Other technical provisions (particulars to be specified by way of supplementary note) 25 Total (21+22+23-24+25) 29

56 Form 25 General insurance business (underwriting year accounting) : Analysis of technical provisions Global business Total treaty reinsurance accepted business Company registration number GL/ UK/ CM day month year Units Category number R25 38921 GL 31 12 2014 000 003 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Reported claims outstanding Claims incurred but not reported Gross amount 11 755 755 Reinsurers' share 12 1702 1702 Gross amount 13 947 947 Reinsurers' share 14 Claims management costs 15 Adjustment for discounting Gross amount 16 Reinsurers' share 17 Claims management costs 18 Allocation to/(from) another risk category of anticipated surplus 19 Balance of the fund 20 Claims outstanding (11-12+13-14+15-16+17-18+19+20) 21 Provision for unearned premiums 22 Provision for unexpired risks 23 Deferred acquisition costs 24 Other technical provisions (particulars to be specified by way of supplementary note) 25 Total (21+22+23-24+25) 29

57 Form 25 General insurance business (underwriting year accounting) : Analysis of technical provisions Global business Total primary (direct) and facultative commercial lines liability business Company registration number GL/ UK/ CM day month year Units Category number R25 38921 GL 31 12 2014 000 270 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Reported claims outstanding Claims incurred but not reported Gross amount 11 1619 1619 Reinsurers' share 12 5146 5146 Gross amount 13 3527 3527 Reinsurers' share 14 Claims management costs 15 Adjustment for discounting Gross amount 16 Reinsurers' share 17 Claims management costs 18 Allocation to/(from) another risk category of anticipated surplus 19 Balance of the fund 20 Claims outstanding (11-12+13-14+15-16+17-18+19+20) 21 Provision for unearned premiums 22 Provision for unexpired risks 23 Deferred acquisition costs 24 Other technical provisions (particulars to be specified by way of supplementary note) 25 Total (21+22+23-24+25) 29

58 Form 25 General insurance business (underwriting year accounting) : Analysis of technical provisions Global business Balance of all primary (direct) and facultative business Company registration number GL/ UK/ CM day month year Units Category number R25 38921 GL 31 12 2014 000 409 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Reported claims outstanding Claims incurred but not reported Gross amount 11 158 158 Reinsurers' share 12 322 322 Gross amount 13 164 164 Reinsurers' share 14 Claims management costs 15 Adjustment for discounting Gross amount 16 Reinsurers' share 17 Claims management costs 18 Allocation to/(from) another risk category of anticipated surplus 19 Balance of the fund 20 Claims outstanding (11-12+13-14+15-16+17-18+19+20) 21 Provision for unearned premiums 22 Provision for unexpired risks 23 Deferred acquisition costs 24 Other technical provisions (particulars to be specified by way of supplementary note) 25 Total (21+22+23-24+25) 29

59 Form 25 General insurance business (underwriting year accounting) : Analysis of technical provisions Global business Total non-proportional treaty reinsurance business accepted Company registration number GL/ UK/ CM day month year Units Category number R25 38921 GL 31 12 2014 000 500 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Reported claims outstanding Claims incurred but not reported Gross amount 11 735 735 Reinsurers' share 12 1645 1645 Gross amount 13 910 910 Reinsurers' share 14 Claims management costs 15 Adjustment for discounting Gross amount 16 Reinsurers' share 17 Claims management costs 18 Allocation to/(from) another risk category of anticipated surplus 19 Balance of the fund 20 Claims outstanding (11-12+13-14+15-16+17-18+19+20) 21 Provision for unearned premiums 22 Provision for unexpired risks 23 Deferred acquisition costs 24 Other technical provisions (particulars to be specified by way of supplementary note) 25 Total (21+22+23-24+25) 29

60 Form 25 General insurance business (underwriting year accounting) : Analysis of technical provisions Global business Balance of all treaty reinsurance accepted business Company registration number GL/ UK/ CM day month year Units Category number R25 38921 GL 31 12 2014 000 709 Underwriting year ended Prior underwriting years MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY MM YY Total all previous columns 29 29 12 05 12 06 12 07 12 08 12 09 12 10 12 11 12 12 12 13 12 14 99 99 Reported claims outstanding Claims incurred but not reported Gross amount 11 20 20 Reinsurers' share 12 57 57 Gross amount 13 37 37 Reinsurers' share 14 Claims management costs 15 Adjustment for discounting Gross amount 16 Reinsurers' share 17 Claims management costs 18 Allocation to/(from) another risk category of anticipated surplus 19 Balance of the fund 20 Claims outstanding (11-12+13-14+15-16+17-18+19+20) 21 Provision for unearned premiums 22 Provision for unexpired risks 23 Deferred acquisition costs 24 Other technical provisions (particulars to be specified by way of supplementary note) 25 Total (21+22+23-24+25) 29

Form 40 Long-term insurance business : Revenue account Total business Summary Units 000 Financial year Previous year 1 2 Income Earned premiums 11 1885511 112239 Investment income receivable before deduction of tax Increase (decrease) in the value of non-linked assets brought into account Increase (decrease) in the value of linked assets 12 577736 506099 13 1111522 (249566) 14 28541 69575 Other income 15 4891 10908 Total income 19 3608201 449255 Expenditure Claims incurred 21 983253 (521849) Expenses payable Interest payable before the deduction of tax Taxation 22 39181 34744 23 100 7 24 60935 113344 Other expenditure 25 Transfer to (from) non technical account 26 170642 325017 Total expenditure 29 1254111 (48737) Business transfers - in 31 557422 Business transfers - out 32 Increase (decrease) in fund in financial year (19-29+31-32) 39 2354090 1055414 Fund brought forward 49 10332816 9277402 Fund carried forward (39+49) 59 12686906 10332816 61

Form 40 Long-term insurance business : Revenue account Subfund With Profits Fund Units 000 Financial year Previous year 1 2 Income Earned premiums 11 28786 41717 Investment income receivable before deduction of tax Increase (decrease) in the value of non-linked assets brought into account Increase (decrease) in the value of linked assets 12 130053 101361 13 133223 22706 14 24681 55088 Other income 15 10788 Total income 19 316743 231660 Expenditure Claims incurred 21 337475 (848566) Expenses payable Interest payable before the deduction of tax Taxation 22 5238 10917 23 24 280 9101 Other expenditure 25 Transfer to (from) non technical account 26 10642 13030 Total expenditure 29 353635 (815518) Business transfers - in 31 Business transfers - out 32 Increase (decrease) in fund in financial year (19-29+31-32) 39 (36892) 1047178 Fund brought forward 49 2591697 1544519 Fund carried forward (39+49) 59 2554805 2591697 62

Form 40 Long-term insurance business : Revenue account Subfund Non-Profit Fund Units 000 Financial year Previous year 1 2 Income Earned premiums 11 1856619 70438 Investment income receivable before deduction of tax Increase (decrease) in the value of non-linked assets brought into account Increase (decrease) in the value of linked assets 12 447235 404191 13 978054 (271974) 14 3860 14487 Other income 15 4891 120 Total income 19 3290659 217262 Expenditure Claims incurred 21 644693 325340 Expenses payable Interest payable before the deduction of tax Taxation 22 33887 23773 23 100 7 24 60661 104224 Other expenditure 25 Transfer to (from) non technical account 26 159000 310987 Total expenditure 29 898341 764331 Business transfers - in 31 557422 Business transfers - out 32 Increase (decrease) in fund in financial year (19-29+31-32) 39 2392318 10353 Fund brought forward 49 7731089 7720736 Fund carried forward (39+49) 59 10123407 7731089 63

Form 40 Long-term insurance business : Revenue account Subfund Permanent Health Fund Units 000 Financial year Previous year 1 2 Income Earned premiums 11 106 84 Investment income receivable before deduction of tax Increase (decrease) in the value of non-linked assets brought into account Increase (decrease) in the value of linked assets 12 448 547 13 245 (298) 14 Other income 15 Total income 19 799 333 Expenditure Claims incurred 21 1085 1377 Expenses payable Interest payable before the deduction of tax Taxation 22 56 54 23 24 (6) 19 Other expenditure 25 Transfer to (from) non technical account 26 1000 1000 Total expenditure 29 2135 2450 Business transfers - in 31 Business transfers - out 32 Increase (decrease) in fund in financial year (19-29+31-32) 39 (1336) (2117) Fund brought forward 49 10030 12147 Fund carried forward (39+49) 59 8694 10030 64

Form 41 Long-term insurance business : Analysis of premiums Total business Summary Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Regular premiums 11 48585 79749 407 128741 115399 Single premiums 12 18841 1766938 9 1785788 30963 Reinsurance - external Regular premiums 13 1193 3480 3 4676 9652 Single premiums 14 2 Reinsurance - intra-group Regular premiums 15 6953 13417 20370 23527 Single premiums 16 3972 3972 942 Net of reinsurance Regular premiums 17 40439 62852 404 103695 82220 Single premiums 18 18841 1762966 9 1781816 30019 Total Gross 19 67426 1846687 416 1914529 146362 Reinsurance 20 8146 20869 3 29018 34123 Net 21 59280 1825818 413 1885511 112239 65

Form 41 Long-term insurance business : Analysis of premiums Subfund With Profits Fund Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Regular premiums 11 26551 10073 398 37022 41968 Single premiums 12 18772 1 9 18782 29205 Reinsurance - external Regular premiums 13 874 8 882 5529 Single premiums 14 Reinsurance - intra-group Regular premiums 15 4776 17388 22164 22985 Single premiums 16 3972 3972 942 Net of reinsurance Regular premiums 17 20901 (7323) 398 13976 13454 Single premiums 18 18772 (3971) 9 14810 28263 Total Gross 19 45323 10074 407 55804 71173 Reinsurance 20 5650 21368 27018 29456 Net 21 39673 (11294) 407 28786 41717 66

Form 41 Long-term insurance business : Analysis of premiums Subfund Non-Profit Fund Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Regular premiums 11 21926 69676 91602 73334 Single premiums 12 69 1766937 1767006 1758 Reinsurance - external Regular premiums 13 318 3472 3790 4119 Single premiums 14 2 Reinsurance - intra-group Regular premiums 15 2170 (3971) (1801) 533 Single premiums 16 Net of reinsurance Regular premiums 17 19438 70175 89613 68682 Single premiums 18 69 1766937 1767006 1756 Total Gross 19 21995 1836613 1858608 75092 Reinsurance 20 2488 (499) 1989 4654 Net 21 19507 1837112 1856619 70438 67

Form 41 Long-term insurance business : Analysis of premiums Subfund Permanent Health Fund Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Regular premiums 11 108 9 117 97 Single premiums 12 Reinsurance - external Regular premiums 13 1 3 4 4 Single premiums 14 Reinsurance - intra-group Regular premiums 15 7 7 9 Single premiums 16 Net of reinsurance Regular premiums 17 100 6 106 84 Single premiums 18 Total Gross 19 108 9 117 97 Reinsurance 20 8 3 11 13 Net 21 100 6 106 84 68

Long-term insurance business : Analysis of claims Form 42 Total business Summary Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Death or disability lump sums 11 26793 7051 281 34125 25256 Disability periodic payments 12 8036 41 45 8122 6613 Surrender or partial surrender 13 63750 170429 549 234728 232313 Annuity payments 14 1061 598491 692 600244 460949 Lump sums on maturity 15 135177 62201 43 197421 213567 Total 16 234817 838213 1610 1074640 938698 Reinsurance - external Death or disability lump sums 21 651 651 3429 Disability periodic payments 22 1631 4 1635 1067 Surrender or partial surrender 23 1367653 Annuity payments 24 73341 73341 72411 Lump sums on maturity 25 Total 26 2282 73341 4 75627 1444560 Reinsurance - intra-group Death or disability lump sums 31 2048 194 2242 2136 Disability periodic payments 32 1085 16 1101 666 Surrender or partial surrender 33 Annuity payments 34 557 557 137 Lump sums on maturity 35 2 11858 11860 13048 Total 36 3135 12625 15760 15987 Net of reinsurance Death or disability lump sums 41 24094 6857 281 31232 19691 Disability periodic payments 42 5320 25 41 5386 4880 Surrender or partial surrender 43 63750 170429 549 234728 (1135340) Annuity payments 44 1061 524593 692 526346 388401 Lump sums on maturity 45 135175 50343 43 185561 200519 Total 46 229400 752247 1606 983253 (521849) 69

Long-term insurance business : Analysis of claims Form 42 Subfund With Profits Fund Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Death or disability lump sums 11 14731 6522 281 21534 22761 Disability periodic payments 12 2919 24 2943 3378 Surrender or partial surrender 13 36241 152534 549 189324 221113 Annuity payments 14 1061 364 692 2117 3401 Lump sums on maturity 15 91394 44865 43 136302 172476 Total 16 146346 204309 1565 352220 423129 Reinsurance - external Death or disability lump sums 21 651 651 3395 Disability periodic payments 22 340 340 390 Surrender or partial surrender 23 1252203 Annuity payments 24 583 Lump sums on maturity 25 Total 26 991 991 1256571 Reinsurance - intra-group Death or disability lump sums 31 1666 194 1860 2039 Disability periodic payments 32 20 16 36 41 Surrender or partial surrender 33 Annuity payments 34 Lump sums on maturity 35 11858 11858 13044 Total 36 1686 12068 13754 15124 Net of reinsurance Death or disability lump sums 41 12414 6328 281 19023 17327 Disability periodic payments 42 2559 8 2567 2947 Surrender or partial surrender 43 36241 152534 549 189324 (1031090) Annuity payments 44 1061 364 692 2117 2818 Lump sums on maturity 45 91394 33007 43 124444 159432 Total 46 143669 192241 1565 337475 (848566) 70

Long-term insurance business : Analysis of claims Form 42 Subfund Non-Profit Fund Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Death or disability lump sums 11 12062 529 12591 2495 Disability periodic payments 12 3294 17 3311 998 Surrender or partial surrender 13 27509 17895 45404 11200 Annuity payments 14 598127 598127 457548 Lump sums on maturity 15 43783 17336 61119 41091 Total 16 86648 633904 720552 513332 Reinsurance - external Death or disability lump sums 21 34 Disability periodic payments 22 837 837 214 Surrender or partial surrender 23 115450 Annuity payments 24 73341 73341 71828 Lump sums on maturity 25 Total 26 837 73341 74178 187526 Reinsurance - intra-group Death or disability lump sums 31 382 382 97 Disability periodic payments 32 740 740 228 Surrender or partial surrender 33 Annuity payments 34 557 557 137 Lump sums on maturity 35 2 2 4 Total 36 1124 557 1681 466 Net of reinsurance Death or disability lump sums 41 11680 529 12209 2364 Disability periodic payments 42 1717 17 1734 556 Surrender or partial surrender 43 27509 17895 45404 (104250) Annuity payments 44 524229 524229 385583 Lump sums on maturity 45 43781 17336 61117 41087 Total 46 84687 560006 644693 325340 71

Long-term insurance business : Analysis of claims Form 42 Subfund Permanent Health Fund Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Death or disability lump sums 11 Disability periodic payments 12 1823 45 1868 2237 Surrender or partial surrender 13 Annuity payments 14 Lump sums on maturity 15 Total 16 1823 45 1868 2237 Reinsurance - external Death or disability lump sums 21 Disability periodic payments 22 454 4 458 463 Surrender or partial surrender 23 Annuity payments 24 Lump sums on maturity 25 Total 26 454 4 458 463 Reinsurance - intra-group Death or disability lump sums 31 Disability periodic payments 32 325 325 397 Surrender or partial surrender 33 Annuity payments 34 Lump sums on maturity 35 Total 36 325 325 397 Net of reinsurance Death or disability lump sums 41 Disability periodic payments 42 1044 41 1085 1377 Surrender or partial surrender 43 Annuity payments 44 Lump sums on maturity 45 Total 46 1044 41 1085 1377 72

Form 43 Long-term insurance business : Analysis of expenses Total business Summary Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Commission - acquisition 11 474 88 562 312 Commission - other 12 1032 136 2 1170 821 Management - acquisition 13 5820 5820 14 Management - maintenance 14 5560 26330 7 31897 35660 Management - other 15 Total 16 7066 32374 9 39449 36807 Reinsurance - external Commission - acquisition 21 Commission - other 22 5 5 7 Management - acquisition 23 Management - maintenance 24 Management - other 25 Total 26 5 5 7 Reinsurance - intra-group Commission - acquisition 31 72 22 94 87 Commission - other 32 148 27 175 180 Management - acquisition 33 Management - maintenance 34 4 (10) (6) 1789 Management - other 35 Total 36 224 39 263 2056 Net of reinsurance Commission - acquisition 41 402 66 468 225 Commission - other 42 879 109 2 990 634 Management - acquisition 43 5820 5820 14 Management - maintenance 44 5556 26340 7 31903 33871 Management - other 45 Total 46 6837 32335 9 39181 34744 73

Form 43 Long-term insurance business : Analysis of expenses Subfund With Profits Fund Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Commission - acquisition 11 130 51 181 229 Commission - other 12 607 55 2 664 760 Management - acquisition 13 Management - maintenance 14 3361 5275 4 8640 14363 Management - other 15 Total 16 4098 5381 6 9485 15352 Reinsurance - external Commission - acquisition 21 Commission - other 22 5 5 6 Management - acquisition 23 Management - maintenance 24 Management - other 25 Total 26 5 5 6 Reinsurance - intra-group Commission - acquisition 31 72 22 94 87 Commission - other 32 147 27 174 179 Management - acquisition 33 Management - maintenance 34 671 3303 3974 4163 Management - other 35 Total 36 890 3352 4242 4429 Net of reinsurance Commission - acquisition 41 58 29 87 142 Commission - other 42 455 28 2 485 575 Management - acquisition 43 Management - maintenance 44 2690 1972 4 4666 10200 Management - other 45 Total 46 3203 2029 6 5238 10917 74

Form 43 Long-term insurance business : Analysis of expenses Subfund Non-Profit Fund Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Commission - acquisition 11 344 37 381 83 Commission - other 12 424 81 505 60 Management - acquisition 13 5820 5820 14 Management - maintenance 14 2144 21055 2 23201 21242 Management - other 15 Total 16 2912 26993 2 29907 21399 Reinsurance - external Commission - acquisition 21 Commission - other 22 Management - acquisition 23 Management - maintenance 24 Management - other 25 Total 26 Reinsurance - intra-group Commission - acquisition 31 Commission - other 32 Management - acquisition 33 Management - maintenance 34 (667) (3313) (3980) (2374) Management - other 35 Total 36 (667) (3313) (3980) (2374) Net of reinsurance Commission - acquisition 41 344 37 381 83 Commission - other 42 424 81 505 60 Management - acquisition 43 5820 5820 14 Management - maintenance 44 2811 24368 2 27181 23616 Management - other 45 Total 46 3579 30306 2 33887 23773 75

Form 43 Long-term insurance business : Analysis of expenses Subfund Permanent Health Fund Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Commission - acquisition 11 Commission - other 12 1 1 1 Management - acquisition 13 Management - maintenance 14 55 1 56 55 Management - other 15 Total 16 56 1 57 56 Reinsurance - external Commission - acquisition 21 Commission - other 22 1 Management - acquisition 23 Management - maintenance 24 Management - other 25 Total 26 1 Reinsurance - intra-group Commission - acquisition 31 Commission - other 32 1 1 1 Management - acquisition 33 Management - maintenance 34 Management - other 35 Total 36 1 1 1 Net of reinsurance Commission - acquisition 41 Commission - other 42 (1) Management - acquisition 43 Management - maintenance 44 55 1 56 55 Management - other 45 Total 46 55 1 56 54 76

Form 44 Long-term insurance business : Linked funds balance sheet Total business Units 000 Financial year Previous year 1 2 Internal linked funds (excluding cross investment) Directly held assets (excluding collective investment schemes) Directly held assets in collective investment schemes of connected companies Directly held assets in other collective investment schemes 11 1930314 2048370 12 13 Total assets (excluding cross investment) (11+12+ 13) 14 1930314 2048370 Provision for tax on unrealised capital gains 15 1493 9086 Secured and unsecured loans 16 43 Other liabilities 17 1883 554 Total net assets (14-15-16-17) 18 1926938 2038687 Directly held linked assets Value of directly held linked assets 21 41990 45376 Total Value of directly held linked assets and units held (18+21) 31 1968928 2084063 Surplus units 32 3636 Deficit units 33 835 Net unit liability (31-32+33) 34 1969763 2080427 77

Form 45 Long-term insurance business : Revenue account for internal linked funds Total business Units 000 Financial year Previous year 1 2 Income Value of total creation of units Investment income attributable to the funds before deduction of tax Increase (decrease) in the value of investments in the financial year Other income 11 49458 22218 12 50362 11226 13 33456 69575 14 2062 1736490 Total income 19 135338 1839509 Expenditure Value of total cancellation of units Charges for management Charges in respect of tax on investment income Taxation on realised capital gains Increase (decrease) in amount set aside for tax on capital gains not yet realised Other expenditure 21 251431 90859 22 1112 1184 23 2752 347 24 (381) 770 25 (8111) 4084 26 284 154 Total expenditure 29 247087 97398 Increase (decrease) in funds in financial year (19-29) Internal linked fund brought forward Internal linked funds carried forward (39+49) 39 (111749) 1742111 49 2038687 296576 59 1926938 2038687 78

Form 46 Long-term insurance business : Summary of new business Total business Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Number of new policyholders/ scheme members for direct insurance business Regular premium business 11 Single premium business 12 Total 13 new regular premiums Direct insurance business 21 1189 271 1459 948 External reinsurance 22 44 11 55 70 Intra-group reinsurance 23 Total 24 1233 282 1515 1018 new single premiums Direct insurance business 25 65 116 181 87 External reinsurance 26 2049 1765421 1767471 Intra-group reinsurance 27 Total 28 2114 1765537 1767652 87 79

80 Form 47 Long-term insurance business : Analysis of new business Total business Units 000 UK Life / Direct Insurance Business Product code number Product description Regular premium business Number of policyholders / scheme members premiums Number of policyholders / scheme members premiums 1 2 3 4 5 6 325 Level term assurance 34 330 Decreasing term assurance 2 Single premium business 710 Life property linked whole life regular premium 1147 65 720 Life property linked endowment regular premium - target cash 6

81 Form 47 Long-term insurance business : Analysis of new business Total business Units 000 UK Life / Reinsurance accepted external Product code number Product description Regular premium business Number of policyholders / scheme members premiums Number of policyholders / scheme members premiums 1 2 3 4 5 6 395 Annuity non-profit (PLA) - Phoenix 2049 710 Life property linked whole life regular premium 44 Single premium business

82 Form 47 Long-term insurance business : Analysis of new business Total business Units 000 UK Pension / Direct Insurance Business Product code number Product description Regular premium business Number of policyholders / scheme members premiums Number of policyholders / scheme members premiums 1 2 3 4 5 6 555 Group deposit administration with-profits 7 Single premium business 725 Individual pensions property linked 264 9 745 DWP National Insurance rebates property linked 107

83 Form 47 Long-term insurance business : Analysis of new business Total business Units 000 UK Pension / Reinsurance accepted external Product code number Product description Regular premium business Number of policyholders / scheme members premiums Number of policyholders / scheme members premiums 1 2 3 4 5 6 400 Annuity non-profit (CPA) - Phoenix 1734511 725 Individual pensions property linked 11 Single premium business 905 Index linked annuity(cpa) - Phoenix 30911

Long-term insurance business : Assets not held to match linked liabilities Form 48 Category of assets 10 Total long term insurance business assets Units 000 Unadjusted assets Economic exposure Expected income from assets in column 2 Yield before adjustment Return on assets in financial year 1 2 3 4 5 Assets backing non-profit liabilities and non-profit capital requirements Land and buildings 11 Approved fixed interest securities 12 531046 531046 17742 2.04 Other fixed interest securities 13 7719168 7719168 370496 3.51 Variable interest securities 14 1146479 1146479 34383 5.28 UK listed equity shares 15 9907 9907 578 Non-UK listed equity shares 16 Unlisted equity shares 17 188498 188498 3234 Other assets 18 1008289 1008289 1012 Total 19 10603387 10603387 427444 3.23 Assets backing with-profits liabilities and with-profits capital requirements Land and buildings 21 Approved fixed interest securities 22 93837 93837 3707 2.04 13.74 Other fixed interest securities 23 1026967 1026967 49823 3.35 11.44 Variable interest securities 24 347 347 (32.80) UK listed equity shares 25 1002041 1018891 60553 0.64 Non-UK listed equity shares 26 Unlisted equity shares 27 Other assets 28 112619 95769 118 (13.41) Total 29 2235811 2235811 114200 1.62 5.54 Overall return on with-profits assets Post investment costs but pre-tax 31 7.02 Return allocated to non taxable 'asset shares' 32 6.72 Return allocated to taxable 'asset shares' 33 6.54 84

Long-term insurance business : Assets not held to match linked liabilities Form 48 Category of assets 11 With Profits Fund Units 000 Unadjusted assets Economic exposure Expected income from assets in column 2 Yield before adjustment Return on assets in financial year 1 2 3 4 5 Assets backing non-profit liabilities and non-profit capital requirements Land and buildings 11 Approved fixed interest securities 12 31127 31127 1230 2.44 Other fixed interest securities 13 91105 91105 4420 3.35 Variable interest securities 14 UK listed equity shares 15 9560 9560 578 5.93 Non-UK listed equity shares 16 Unlisted equity shares 17 Other assets 18 14267 14267 15 0.10 Total 19 146059 146059 6242 3.01 Assets backing with-profits liabilities and with-profits capital requirements Land and buildings 21 Approved fixed interest securities 22 93837 93837 3707 2.04 13.74 Other fixed interest securities 23 1026967 1026967 49823 3.35 11.44 Variable interest securities 24 347 347 (32.80) UK listed equity shares 25 1002041 1018891 60553 5.93 0.64 Non-UK listed equity shares 26 Unlisted equity shares 27 Other assets 28 112619 95769 118 1.10 (13.41) Total 29 2235811 2235811 114200 4.37 5.54 Overall return on with-profits assets Post investment costs but pre-tax 31 7.02 Return allocated to non taxable 'asset shares' 32 6.72 Return allocated to taxable 'asset shares' 33 6.54 85

Long-term insurance business : Assets not held to match linked liabilities Form 48 Category of assets 12 Non-Profit Fund Units 000 Unadjusted assets Economic exposure Expected income from assets in column 2 Yield before adjustment Return on assets in financial year 1 2 3 4 5 Assets backing non-profit liabilities and non-profit capital requirements Land and buildings 11 Approved fixed interest securities 12 499283 499283 16494 2.02 Other fixed interest securities 13 7619905 7619905 365656 3.51 Variable interest securities 14 1146479 1146479 34383 5.28 UK listed equity shares 15 347 347 Non-UK listed equity shares 16 Unlisted equity shares 17 188498 188498 3234 Other assets 18 993741 993741 994 0.13 Total 19 10448253 10448253 420761 3.25 Assets backing with-profits liabilities and with-profits capital requirements Land and buildings 21 Approved fixed interest securities 22 Other fixed interest securities 23 Variable interest securities 24 UK listed equity shares 25 Non-UK listed equity shares 26 Unlisted equity shares 27 Other assets 28 Total 29 Overall return on with-profits assets Post investment costs but pre-tax 31 Return allocated to non taxable 'asset shares' 32 Return allocated to taxable 'asset shares' 33 86

Long-term insurance business : Assets not held to match linked liabilities Form 48 Category of assets 13 Permanent Health Fund Units 000 Unadjusted assets Economic exposure Expected income from assets in column 2 Yield before adjustment Return on assets in financial year 1 2 3 4 5 Assets backing non-profit liabilities and non-profit capital requirements Land and buildings 11 Approved fixed interest securities 12 636 636 18 0.55 Other fixed interest securities 13 8157 8157 420 2.88 Variable interest securities 14 UK listed equity shares 15 Non-UK listed equity shares 16 Unlisted equity shares 17 Other assets 18 281 281 3 0.33 Total 19 9074 9074 441 2.64 Assets backing with-profits liabilities and with-profits capital requirements Land and buildings 21 Approved fixed interest securities 22 Other fixed interest securities 23 Variable interest securities 24 UK listed equity shares 25 Non-UK listed equity shares 26 Unlisted equity shares 27 Other assets 28 Total 29 Overall return on with-profits assets Post investment costs but pre-tax 31 Return allocated to non taxable 'asset shares' 32 Return allocated to taxable 'asset shares' 33 87

Form 49 Long-term insurance business : Fixed and variable interest assets Category of assets 10 Total long term insurance business assets Units 000 Value of assets Mean term Yield before adjustment Yield after adjustment 1 2 3 4 UK Government approved fixed interest securities 11 453115 21.97 2.03 2.03 Other approved fixed interest securities 21 171768 13.78 2.07 2.05 Other fixed interest securities AAA/Aaa 31 413964 11.81 2.53 2.33 AA/Aa 32 638220 13.92 2.70 2.37 A/A 33 3062442 14.78 3.29 2.75 BBB/Baa 34 4387254 11.35 3.76 2.90 BB/Ba 35 213701 8.35 4.57 2.66 B/B 36 28730 11.15 5.91 2.09 CCC/Caa 37 Other (including unrated) 38 1823 9.63 Total other fixed interest securities 39 8746134 12.68 3.49 2.77 Approved variable interest securities 41 54363 18.41 2.27 2.27 Other variable interest securities 51 1092463 8.69 5.43 3.06 Total (11+21+39+41+51) 61 10517843 12.71 3.60 2.75 88

Form 49 Long-term insurance business : Fixed and variable interest assets Category of assets 11 With Profits Fund Units 000 Value of assets Mean term Yield before adjustment Yield after adjustment 1 2 3 4 UK Government approved fixed interest securities 11 9512 40.93 2.45 2.45 Other approved fixed interest securities 21 115452 14.46 2.11 2.11 Other fixed interest securities AAA/Aaa 31 53619 16.22 2.69 2.48 AA/Aa 32 109531 12.62 2.61 2.29 A/A 33 370332 13.37 3.09 2.59 BBB/Baa 34 551586 12.26 3.68 2.84 BB/Ba 35 27544 6.90 4.05 2.24 B/B 36 4957 10.00 6.08 2.23 CCC/Caa 37 Other (including unrated) 38 503 9.63 Total other fixed interest securities 39 1118072 12.71 3.35 2.67 Approved variable interest securities 41 Other variable interest securities 51 347 40.00 Total (11+21+39+41+51) 61 1243383 13.10 3.23 2.62 89

Form 49 Long-term insurance business : Fixed and variable interest assets Category of assets 12 Non-Profit Fund Units 000 Value of assets Mean term Yield before adjustment Yield after adjustment 1 2 3 4 UK Government approved fixed interest securities 11 443378 21.57 2.02 2.02 Other approved fixed interest securities 21 55905 12.44 2.00 1.94 Other fixed interest securities AAA/Aaa 31 360345 11.15 2.51 2.30 AA/Aa 32 528690 14.19 2.72 2.38 A/A 33 2686964 14.99 3.32 2.77 BBB/Baa 34 3833453 11.22 3.77 2.91 BB/Ba 35 185360 8.55 4.65 2.72 B/B 36 23773 11.39 5.88 2.06 CCC/Caa 37 Other (including unrated) 38 1320 9.63 Total other fixed interest securities 39 7619905 12.69 3.51 2.79 Approved variable interest securities 41 54363 18.41 2.27 2.27 Other variable interest securities 51 1092116 8.68 5.43 3.06 Total (11+21+39+41+51) 61 9265668 12.67 3.65 2.78 90

Form 49 Long-term insurance business : Fixed and variable interest assets Category of assets 13 Permanent Health Fund Units 000 Value of assets Mean term Yield before adjustment Yield after adjustment 1 2 3 4 UK Government approved fixed interest securities 11 225 7.18 1.45 1.45 Other approved fixed interest securities 21 411 5.51 0.05 0.05 Other fixed interest securities AAA/Aaa 31 AA/Aa 32 A/A 33 5146 6.05 2.16 1.81 BBB/Baa 34 2215 6.33 3.47 2.56 BB/Ba 35 796 11.46 5.93 3.24 B/B 36 CCC/Caa 37 Other (including unrated) 38 Total other fixed interest securities 39 8157 6.66 2.88 2.15 Approved variable interest securities 41 Other variable interest securities 51 Total (11+21+39+41+51) 61 8793 6.62 2.71 2.03 91

Form 50 Long-term insurance business : Summary of mathematical reserves Total business Summary Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Form 51 - with-profits 11 179310 1128723 15395 1323427 1232931 Form 51 - non-profit 12 92358 10565918 10979 10669255 8164558 Form 52 13 28128 426916 455044 470815 Form 53 - linked 14 652634 1326754 233 1979621 2093273 Form 53 - non-linked 15 35372 4862 1 40236 50576 Form 54 - linked 16 214 143197 143411 56909 Form 54 - non-linked 17 4923 4923 5089 Total 18 992940 13596369 26608 14615917 12074152 Reinsurance - external Form 51 - with-profits 21 818 20 839 803 Form 51 - non-profit 22 16349 1416399 50 1432799 1355225 Form 52 23 Form 53 - linked 24 Form 53 - non-linked 25 7 7 8 Form 54 - linked 26 Form 54 - non-linked 27 289 289 276 Total 28 17464 1416399 70 1433933 1356312 Reinsurance - intra-group Form 51 - with-profits 31 853564 853564 775514 Form 51 - non-profit 32 3850 3850 4029 Form 52 33 24 436 460 473 Form 53 - linked 34 9858 9858 12846 Form 53 - non-linked 35 13797 1763 15560 20395 Form 54 - linked 36 Form 54 - non-linked 37 1650 1650 1646 Total 38 19322 865621 884943 814903 Net of reinsurance Form 51 - with-profits 41 178492 275158 15375 469024 456614 Form 51 - non-profit 42 72158 9149519 10929 9232606 6805304 Form 52 43 28104 426480 454584 470342 Form 53 - linked 44 652634 1316896 233 1969763 2080427 Form 53 - non-linked 45 21568 3100 1 24669 30173 Form 54 - linked 46 214 143197 143411 56909 Form 54 - non-linked 47 2984 2984 3167 Total 48 956154 11314349 26538 12297041 9902937 92

Form 50 Long-term insurance business : Summary of mathematical reserves Subfund With Profits Fund Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Form 51 - with-profits 11 179310 1128723 15395 1323427 1232931 Form 51 - non-profit 12 48509 52205 10640 111354 93745 Form 52 13 28128 426916 455044 470815 Form 53 - linked 14 284966 1216239 233 1501439 1547820 Form 53 - non-linked 15 17399 1883 1 19283 24038 Form 54 - linked 16 Form 54 - non-linked 17 3011 3011 3207 Total 18 561323 2825966 26269 3413558 3372557 Reinsurance - external Form 51 - with-profits 21 818 20 839 803 Form 51 - non-profit 22 4208 4208 4150 Form 52 23 Form 53 - linked 24 Form 53 - non-linked 25 7 7 8 Form 54 - linked 26 Form 54 - non-linked 27 289 289 276 Total 28 5322 20 5342 5237 Reinsurance - intra-group Form 51 - with-profits 31 853564 853564 775514 Form 51 - non-profit 32 1576 1576 1618 Form 52 33 24 436 460 473 Form 53 - linked 34 Form 53 - non-linked 35 871 1761 2632 2606 Form 54 - linked 36 Form 54 - non-linked 37 174 174 239 Total 38 2645 855761 858406 780450 Net of reinsurance Form 51 - with-profits 41 178492 275158 15375 469024 456614 Form 51 - non-profit 42 42725 52205 10640 105571 87978 Form 52 43 28104 426480 454584 470342 Form 53 - linked 44 284966 1216239 233 1501439 1547820 Form 53 - non-linked 45 16521 122 1 16644 21424 Form 54 - linked 46 Form 54 - non-linked 47 2548 2548 2692 Total 48 553356 1970205 26249 2549810 2586871 93

Form 50 Long-term insurance business : Summary of mathematical reserves Subfund Non-Profit Fund Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Form 51 - with-profits 11 Form 51 - non-profit 12 30024 10513712 10543736 8056359 Form 52 13 Form 53 - linked 14 367668 110514 478182 545453 Form 53 - non-linked 15 17973 2979 20953 26538 Form 54 - linked 16 214 143197 143411 56909 Form 54 - non-linked 17 1912 1912 1882 Total 18 417792 10770403 11188195 8687140 Reinsurance - external Form 51 - with-profits 21 Form 51 - non-profit 22 7891 1416399 1424290 1346933 Form 52 23 Form 53 - linked 24 Form 53 - non-linked 25 Form 54 - linked 26 Form 54 - non-linked 27 Total 28 7891 1416399 1424290 1346933 Reinsurance - intra-group Form 51 - with-profits 31 Form 51 - non-profit 32 Form 52 33 Form 53 - linked 34 9858 9858 12846 Form 53 - non-linked 35 12926 2 12928 17789 Form 54 - linked 36 Form 54 - non-linked 37 1476 1476 1407 Total 38 14402 9860 24262 32042 Net of reinsurance Form 51 - with-profits 41 Form 51 - non-profit 42 22133 9097313 9119447 6709426 Form 52 43 Form 53 - linked 44 367668 100656 468324 532607 Form 53 - non-linked 45 5047 2978 8025 8749 Form 54 - linked 46 214 143197 143411 56909 Form 54 - non-linked 47 436 436 475 Total 48 395499 9344144 9739643 7308166 94

Form 50 Long-term insurance business : Summary of mathematical reserves Subfund Permanent Health Fund Units 000 UK Life UK Pension Overseas Total Financial year Total Previous year 1 2 3 4 5 Gross Form 51 - with-profits 11 Form 51 - non-profit 12 13825 339 14164 14454 Form 52 13 Form 53 - linked 14 Form 53 - non-linked 15 Form 54 - linked 16 Form 54 - non-linked 17 Total 18 13825 339 14164 14454 Reinsurance - external Form 51 - with-profits 21 Form 51 - non-profit 22 4251 50 4301 4143 Form 52 23 Form 53 - linked 24 Form 53 - non-linked 25 Form 54 - linked 26 Form 54 - non-linked 27 Total 28 4251 50 4301 4143 Reinsurance - intra-group Form 51 - with-profits 31 Form 51 - non-profit 32 2275 2275 2412 Form 52 33 Form 53 - linked 34 Form 53 - non-linked 35 Form 54 - linked 36 Form 54 - non-linked 37 Total 38 2275 2275 2412 Net of reinsurance Form 51 - with-profits 41 Form 51 - non-profit 42 7299 289 7588 7900 Form 52 43 Form 53 - linked 44 Form 53 - non-linked 45 Form 54 - linked 46 Form 54 - non-linked 47 Total 48 7299 289 7588 7900 95

96 Form 51 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) (Sheet 1) Subfund With Profits Fund Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 100 Conventional whole life with-profits OB 5788 64273 816 46907 120 Conventional endowment with-profits OB savings 28 144 1 174 125 Conventional endowment with-profits OB target cash 5353 105251 2873 98643 125 Conventional endowment with-profits OB target cash - Countrywide Assured 34759 1032 33548 155 Conventional pensions endowment with-profits 1 2 165 Conventional deferred annuity with-profits - Pension Plus 1 2 37 300 Regular premium non-profit WL/EA OB 5032 14973 113 10001 325 Level term assurance 3270 242478 752 3300 325 Level term assurance - convertible 769 47815 118 280 325 Level term assurance - IBP 3023 263880 459 868 330 Decreasing term assurance 2242 57537 635 71 330 Decreasing term assurance - IBP 879 30923 160 (104) 335 Decreasing term assurance (rider benefits) 10941 209 460 345 Accelerated critical illness (reviewable premiums) - Homeguard Plus 765 22555 173 25 345 Accelerated critical illness (reviewable premiums) - IBP 446 25042 150 929

97 Form 51 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) (Sheet 2) Subfund With Profits Fund Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 345 Accelerated critical illness (reviewable premiums) - LICI 479 39089 154 940 355 Stand-alone critical illness (reviewable premiums) - Critical Illness Plan 710 73872 290 1494 355 Stand-alone critical illness (reviewable premiums) - IBP 186 15976 66 530 365 Income protection non-profit (reviewable premiums) - IBP 3 102 2 8 380 Miscellaneous protection rider 4530 15 7 380 Miscellaneous protection rider - IBP 31810 21 195 385 Income protection claims in payment 10 54 390 Deferred annuity non-profit 41 27 600 395 Annuity non-profit (PLA) 1 2 23 410 Group life - GSB 17027 289 32 415 Collective life 2686 24 24 420 Group income protection 283 6 78 425 Group income protection claims in payment 1440 9896 435 Miscellaneous non-profit 141 3916 49 45 435 Miscellaneous non-profit - Dynamic Cover Plan 7 535 5 1

98 Form 51 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) (Sheet 3) Subfund With Profits Fund Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 440 Additional reserves non-profit OB 18752

99 Form 51 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) (Sheet 1) Subfund With Profits Fund Units 000 UK Life / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 100 Conventional whole life with-profits OB 1132 3 818 300 Regular premium non-profit WL/EA OB 421 249 325 Level term assurance 30021 27 496 325 Level term assurance - convertible 5629 8 17 325 Level term assurance - IBP 48790 72 160 330 Decreasing term assurance 61 1 1 330 Decreasing term assurance - IBP 4364 19 (11) 335 Decreasing term assurance (rider benefits) 44 2 1 345 Accelerated critical illness (reviewable premiums) - Homeguard Plus 10 345 Accelerated critical illness (reviewable premiums) - IBP 14413 78 545 345 Accelerated critical illness (reviewable premiums) - LICI 684 4 6 355 Stand-alone critical illness (reviewable premiums) - Critical Illness Plan 4598 18 160 355 Stand-alone critical illness (reviewable premiums) - IBP 9564 35 320 365 Income protection non-profit (reviewable premiums) - IBP 9 1 380 Miscellaneous protection rider 55 4 6

100 Form 51 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) (Sheet 2) Subfund With Profits Fund Units 000 UK Life / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 380 Miscellaneous protection rider - IBP 17926 10 116 425 Group income protection claims in payment 258 2141 435 Miscellaneous non-profit 13

101 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund With Profits Fund Units 000 UK Life / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 325 Level term assurance - IBP 150563 271 496 330 Decreasing term assurance - IBP 18591 99 (65) 345 Accelerated critical illness (reviewable premiums) - IBP 7440 50 269 355 Stand-alone critical illness (reviewable premiums) - IBP 4488 22 147 365 Income protection non-profit (reviewable premiums) - IBP 65 1 5 380 Miscellaneous protection rider - IBP 9719 8 53 425 Group income protection claims in payment 77 510 440 Additional reserves non-profit OB 162

102 Form 51 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) (Sheet 1) Subfund With Profits Fund Units 000 UK Pension / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 100 Conventional whole life with-profits OB 1 3 3 120 Conventional endowment with-profits OB savings 3 49 42 155 Conventional pensions endowment with-profits 2 4 165 Conventional deferred annuity with-profits 7 37 165 Conventional deferred annuity with-profits - Countrywide Assured 112 5 1811 165 Conventional deferred annuity with-profits - Participating Pension 7 5 67 165 Conventional deferred annuity with-profits - Pension Plus 11427 64173 103 902044 165 Conventional deferred annuity with-profits - Personal Pension 7246 16173 584 186621 175 Group conventional deferred annuity with-profits 3 175 Group conventional deferred annuity with-profits - chargeable rates 823 15079 175 Group conventional deferred annuity with-profits - Pension Plus 1485 73 23013 300 Regular premium non-profit WL/EA OB 13 26 51 325 Level term assurance 464 112159 67 3065 330 Decreasing term assurance 3 23 380 Miscellaneous protection rider 39558 1 9006

103 Form 51 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) (Sheet 2) Subfund With Profits Fund Units 000 UK Pension / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 390 Deferred annuity non-profit 284 782 16776 390 Deferred annuity non-profit - Pension Plus 255 7576 390 Deferred annuity non-profit - Retirement Bond 4 12 208 400 Annuity non-profit (CPA) 6 41 244 410 Group life 8461 55 55 411 Group death in service dependants' annuities 4882 10 10 435 Miscellaneous non-profit 360 5096 2 300 440 Additional reserves non-profit OB 14915

104 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund With Profits Fund Units 000 UK Pension / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 165 Conventional deferred annuity with-profits - Pension Plus 61185 37 853564

105 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund With Profits Fund Units 000 Overseas / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 100 Conventional whole life with-profits OB 67 1202 9 890 120 Conventional endowment with-profits OB savings 11 626 15 614 155 Conventional pensions endowment with-profits 2 1 58 165 Conventional deferred annuity with-profits - Pension Plus 161 799 63 13834 300 Regular premium non-profit WL/EA OB 18 60 1 42 325 Level term assurance 16 1021 3 13 325 Level term assurance - convertible 4 328 1 9 330 Decreasing term assurance 4 37 335 Decreasing term assurance (rider benefits) 63 1 1 380 Miscellaneous protection rider 38 10 390 Deferred annuity non-profit 4 13 114 395 Annuity non-profit (PLA) 209 690 10288 415 Collective life 210 162 435 Miscellaneous non-profit 1 30

106 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund With Profits Fund Units 000 Overseas / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 100 Conventional whole life with-profits OB 23 20

107 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund Non-Profit Fund Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 325 Level term assurance (GLLA) 1780 294459 507 924 330 Decreasing term assurance (GLLA) 314 28303 152 (109) 345 Accelerated critical illness (reviewable premiums) (GLLA) 362 60037 168 1063 355 Stand-alone critical illness (reviewable premiums) (GLLA) 87 14431 63 508 365 Income protection non-profit (reviewable premiums) (GLLA) 137 2 12 380 Miscellaneous protection rider (GLLA) 32390 24 199 390 Deferred annuity non-profit 137 24 333 395 Annuity non-profit (PLA) 1427 939 7687 395 Annuity non-profit (PLA) - PLL AlbaWP 227 1532 425 Group income protection claims in payment (GPM) 2113 17658 435 Miscellaneous non-profit 5 440 Additional reserves non-profit OB (GLLA) 9 440 Additional reserves non-profit OB (GPM) 204

108 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund Non-Profit Fund Units 000 UK Life / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 325 Level term assurance (GLLA) 25988 45 145 330 Decreasing term assurance (GLLA) 1048 5 (6) 345 Accelerated critical illness (reviewable premiums) (GLLA) 28791 66 508 355 Stand-alone critical illness (reviewable premiums) (GLLA) 6731 25 244 380 Miscellaneous protection rider (GLLA) 14636 8 100 395 Annuity non-profit (PLA) 6 425 Group income protection claims in payment (GPM) 854 6894

109 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund Non-Profit Fund Units 000 UK Pension / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 390 Deferred annuity non-profit 3590 9275 126278 390 Deferred annuity non-profit - Pension Plus 2661 21976 268766 390 Deferred annuity non-profit - reassured from With Profits Fund 61185 37 855876 400 Annuity non-profit (CPA) 49268 91644 1670513 400 Annuity non-profit (CPA) - NPLL 32100 57973 480558 400 Annuity non-profit (CPA) - Pearl 82305 68244 1072495 400 Annuity non-profit (CPA) - PLL 185249 231098 3114935 400 Annuity non-profit (CPA) - PLL AlbaWP 24237 308897 400 Annuity non-profit (CPA) - PLL PhnWP 38594 552396 400 Annuity non-profit (CPA) - PLL SALWP 61596 889586 400 Annuity non-profit (CPA) - reassured to SE 37798 70266 1002556 400 Annuity non-profit (CPA) (GPM) 8906 4119 71698 440 Additional reserves non-profit OB 99157

110 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund Non-Profit Fund Units 000 UK Pension / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 400 Annuity non-profit (CPA) - NPLL 31813 62372 400 Annuity non-profit (CPA) - PLL 91612 351191 400 Annuity non-profit (CPA) - reassured to SE 70266 1002836

111 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund Permanent Health Fund Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 360 Income protection non-profit (guaranteed premiums) 292 1243 29 290 380 Miscellaneous protection rider 81 385 Income protection claims in payment 70 297 425 Group income protection claims in payment 1520 13206 435 Miscellaneous non-profit 4 440 Additional reserves non-profit OB 32

112 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund Permanent Health Fund Units 000 UK Life / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 360 Income protection non-profit (guaranteed premiums) 152 4 20 385 Income protection claims in payment 1 425 Group income protection claims in payment 437 4230

113 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund Permanent Health Fund Units 000 UK Life / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 360 Income protection non-profit (guaranteed premiums) 283 6 78 385 Income protection claims in payment 10 54 425 Group income protection claims in payment 280 2143

114 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund Permanent Health Fund Units 000 Overseas / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 360 Income protection non-profit (guaranteed premiums) 60 344 8 131 380 Miscellaneous protection rider 20 385 Income protection claims in payment 5 15 420 Group income protection 20 5 425 Group income protection claims in payment 23 188

115 Long-term insurance business : Valuation summary of non-linked contracts (other than accumulating with-profits contracts) Form 51 Subfund Permanent Health Fund Units 000 Overseas / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 360 Income protection non-profit (guaranteed premiums) 141 3 47 385 Income protection claims in payment 2 4

116 Long-term insurance business : Valuation summary of accumulating with-profits contracts Form 52 Subfund With Profits Fund Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 505 Life UWP whole life regular premium - Freedom 204 18093 193 409 417 6 423 505 Life UWP whole life regular premium - Freedom composite UWP element 7277 7432 7432 505 Life UWP whole life regular premium - Freedom For Homebuyers 951 37728 944 13397 13682 2 13684 505 Life UWP whole life regular premium - Freedom Lifetime 10 218 6 61 63 63 510 515 Life UWP endowment regular premium - savings - Freedom Capital Builder Life UWP endowment regular premium - target cash - Freedom Mortgage 9 180 3 56 57 57 577 18327 369 6301 6435 6435 595 Income protection rider 951 21 21 605 Miscellaneous protection rider 11 11

117 Long-term insurance business : Valuation summary of accumulating with-profits contracts Form 52 Subfund With Profits Fund Units 000 UK Life / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 505 Life UWP whole life regular premium 12658 82 mathematical reserves

118 Long-term insurance business : Valuation summary of accumulating with-profits contracts Form 52 Subfund With Profits Fund Units 000 UK Life / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 505 Life UWP whole life regular premium - Freedom 36825 532 8 8 595 Income protection rider 405 9 5 5 605 Miscellaneous protection rider 11 11

119 Long-term insurance business : Valuation summary of accumulating with-profits contracts Form 52 Subfund With Profits Fund Units 000 UK Pension / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 525 Individual pensions UWP - Choices Company Account 221 2095 93 1990 2061 52 2113 525 Individual pensions UWP - Choices composite UWP element 117871 122041 122041 525 Individual pensions UWP - Choices Executive Account 68 1438 16 1420 1471 10 1481 525 Individual pensions UWP - Choices FSAVC 108 1157 29 1125 1165 1165 525 Individual pensions UWP - Choices Group Personal Pension 644 10818 24 10765 11146 10 11156 525 Individual pensions UWP - Choices In Scheme AVC 11 89 2 89 92 2 94 525 Individual pensions UWP - Choices Personal Pension 5414 110370 593 107037 110824 66 110890 525 Individual pensions UWP - Countrywide Assured Privilege 5703 61 5703 5703 1 5704 525 Individual pensions UWP - Countrywide Assured Privilege composite UWP element 4115 4115 4115 555 Group deposit administration with-profits - DPA 1900 1900 2400 2400 555 Group deposit administration with-profits - Pension Saver 68384 289 68384 72184 72184 565 DWP National Insurance rebates UWP - Choices Protected Rights Only 7324 90077 90077 93263 280 93543 580 Term assurance rider - Choices excess life cover 241 2 11 11 4 15 605 Miscellaneous protection rider 15 15

120 Long-term insurance business : Valuation summary of accumulating with-profits contracts Form 52 Subfund With Profits Fund Units 000 UK Pension / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 525 Individual pensions UWP - Choices 3438 2165 421 421 605 Miscellaneous protection rider 15 15

121 Form 53 Long-term insurance business : Valuation summary of property linked contracts (Sheet 1) Subfund With Profits Fund Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 700 Life property linked single premium - Countrywide Assured Portfolio 744 744 744 744 710 Life property linked whole life regular premium - Countrywide Assured Horizon 49171 484 2074 2074 156 2230 710 Life property linked whole life regular premium - Freedom 1807 167595 2075 5948 5948 49 5997 710 Life property linked whole life regular premium - Freedom For Homebuyers 5419 214012 5950 105023 105023 15 105038 710 Life property linked whole life regular premium - Freedom Lifetime 57 1978 52 600 600 1 600 710 Life property linked whole life regular premium - Guardhill 1738 45773 125 43727 34545 681 35226 710 Life property linked whole life regular premium - Property Bond 287 5087 7 5087 5087 15 5102 715 715 720 720 Life property linked endowment regular premium - savings - Freedom Capital Builder Life property linked endowment regular premium - savings - Guardhill Life property linked endowment regular premium - target cash - Countrywide Assured Enterprise Life property linked endowment regular premium - target cash - Freedom Mortgage 42 1344 29 496 496 496 326 7818 27 7717 7282 34 7317 130818 3126 97849 97849 26 97875 1700 57118 1182 25039 25039 25039 770 Term assurance rider 438675 1942 223 223 785 Income protection rider 20662 315 5507 5507 790 Miscellaneous protection rider 3418 114 688 688 795 Miscellaneous property linked - Countrywide Assured Tempus 14267 49 279 279 5 283

122 Form 53 Long-term insurance business : Valuation summary of property linked contracts (Sheet 2) Subfund With Profits Fund Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 800 Additional reserves property linked 10000 10000

123 Long-term insurance business : Valuation summary of property linked contracts Form 53 Subfund With Profits Fund Units 000 UK Life / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 770 Term assurance rider 77902 415 2 2 785 Income protection rider 201 11 5 5 790 Miscellaneous protection rider 8

124 Long-term insurance business : Valuation summary of property linked contracts Form 53 Subfund With Profits Fund Units 000 UK Life / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 710 Life property linked whole life regular premium - Freedom 220620 3382 115 115 785 Income protection rider 3440 83 757 757

125 Long-term insurance business : Valuation summary of property linked contracts Form 53 Subfund With Profits Fund Units 000 UK Pension / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 725 Individual pensions property linked - Choices Company Account 403 2588 82 1730 1730 83 1813 725 Individual pensions property linked - Choices Executive Account 301 6922 49 5764 5764 42 5805 725 Individual pensions property linked - Choices FSAVC 2063 30728 673 27622 27622 27622 725 Individual pensions property linked - Choices Group Personal Pension 1782 35679 121 30310 30310 27 30337 725 Individual pensions property linked - Choices In Scheme AVC 163 1979 36 1942 1942 25 1967 725 Individual pensions property linked - Choices Personal Pension 34693 836924 5372 740774 740774 431 741205 725 Individual pensions property linked - Countrywide Assured Privilege 42267 318 38214 38214 81 38296 735 Group money purchase pensions property linked 1913 1913 1913 13 1926 735 745 Group money purchase pensions property linked - MPP units from Non-Profit Fund DWP National Insurance rebates property linked - Choices Protected Rights Only 9858 9858 9858 9858 26561 399647 357959 357959 1020 358979 790 Miscellaneous protection rider 1392 10 153 153 160 313

126 Long-term insurance business : Valuation summary of property linked contracts Form 53 Subfund With Profits Fund Units 000 UK Pension / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 770 Term assurance rider 1867 10 mathematical reserves

127 Long-term insurance business : Valuation summary of property linked contracts Form 53 Subfund With Profits Fund Units 000 UK Pension / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 725 Individual pensions property linked - Choices 30485 12047 1628 1628 790 Miscellaneous protection rider 133 133

128 Long-term insurance business : Valuation summary of property linked contracts Form 53 Subfund With Profits Fund Units 000 Overseas / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 710 Life property linked whole life regular premium - Guardhill 3 155 1 152 127 1 129 710 Life property linked whole life regular premium - Property Bond 2 71 71 71 71 715 Life property linked endowment regular premium - savings - Guardhill 2 39 38 35 35

129 Form 53 Long-term insurance business : Valuation summary of property linked contracts (Sheet 1) Subfund Non-Profit Fund Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 700 Life property linked single premium - Investment Bond (GLLA) 3646 95075 95061 95061 144 95205 710 Life property linked whole life regular premium - Capital Builder (GLLA) 1558 28725 317 28717 28717 1 28718 710 Life property linked whole life regular premium - Freedom (GLLA) 7853 839134 8660 45088 45088 91 45179 710 710 Life property linked whole life regular premium - Freedom reassurance from With Profits Fund Life property linked whole life regular premium - Freedom reassurance from With Profits Fund (GLLA) 77234 1174 22 22 180212 2739 51 51 710 Life property linked whole life regular premium - HIP (GLLA) 55 2236 1 2235 2235 2235 710 Life property linked whole life regular premium - Lifeplan (GLLA) 301 31004 220 3444 3444 6 3451 715 715 720 720 Life property linked endowment regular premium - savings - HIP (GLLA) Life property linked endowment regular premium - savings - Maximum (GLLA) Life property linked endowment regular premium - target cash - Homebuilder (GLLA) Life property linked endowment regular premium - target cash - Homebuilder Plus (GLLA) 118 5152 24 5151 5151 5151 16 637 3 626 626 626 7143 230653 5997 167129 167129 38 167167 724 22810 671 20216 20216 3 20219 785 Income protection rider 1137 28 13 13 785 Income protection rider - claims in payment 4 33 33 785 Income protection rider - claims in payment (GLLA) 558 4280 4280 785 Income protection rider (GLLA) 14682 65 259 259

130 Form 53 Long-term insurance business : Valuation summary of property linked contracts (Sheet 2) Subfund Non-Profit Fund Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 790 Miscellaneous protection rider 18 18 790 Miscellaneous protection rider (GLLA) 3 265 265 800 Additional reserves property linked 48 48 800 Additional reserves property linked (GLLA) 12699 12699

131 Long-term insurance business : Valuation summary of property linked contracts Form 53 Subfund Non-Profit Fund Units 000 UK Life / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 710 Life property linked whole life regular premium - Freedom (GLLA) 20279 142 mathematical reserves

132 Long-term insurance business : Valuation summary of property linked contracts Form 53 Subfund Non-Profit Fund Units 000 UK Life / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 710 Life property linked whole life regular premium - Freedom (GLLA) 434775 1920 217 217 785 Income protection rider - claims in payment (GLLA) 312 2523 2523 785 Income protection rider (GLLA) 9383 313 186 186 790 Miscellaneous protection rider (GLLA) 8 800 Additional reserves property linked (GLLA) 10000 10000

133 Long-term insurance business : Valuation summary of property linked contracts Form 53 Subfund Non-Profit Fund Units 000 UK Pension / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities mathematical reserves 1 2 3 4 5 6 7 8 9 725 Individual pensions property linked - Choices reassurance from With Profits Fund 4264 615 615 725 Individual pensions property linked - Choices reassurance from With Profits Fund (GPM) 9948 1434 1434 725 Individual pensions property linked - Pension Builder (GPM) 3743 50570 218 50570 49943 208 50152 725 Individual pensions property linked - SSIP (GPM) 24 3018 3018 3018 3018 725 Individual pensions property linked - VIP (GPM) 1346 14723 73 14723 14351 573 14924 735 Group money purchase pensions property linked (GPM) 9855 9855 9855 9855 765 Group managed fund (GPM) 268 33347 33347 33347 770 Term assurance rider 10177 770 Term assurance rider (GPM) 23746 790 Miscellaneous protection rider 44 44 790 Miscellaneous protection rider (GPM) 1 105 105

134 Form 53 Long-term insurance business : Valuation summary of property linked contracts Subfund Non-Profit Fund Units 000 UK Pension / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities mathematical reserves 1 2 3 4 5 6 7 8 9 Group money purchase pensions property linked - units to With 735 9858 9858 9858 9858 Profits Fund (GPM) 790 Miscellaneous protection rider (GPM) 1 2 2

135 Long-term insurance business : Valuation summary of index linked contracts Form 54 Subfund With Profits Fund Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 901 Index linked income protection claims in payment 330 3011 3011

136 Long-term insurance business : Valuation summary of index linked contracts Form 54 Subfund With Profits Fund Units 000 UK Life / Reinsurance ceded external Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 901 Index linked income protection claims in payment 24 289 289

137 Long-term insurance business : Valuation summary of index linked contracts Form 54 Subfund With Profits Fund Units 000 UK Life / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 901 Index linked income protection claims in payment 13 174 174

138 Long-term insurance business : Valuation summary of index linked contracts Form 54 Subfund Non-Profit Fund Units 000 UK Life / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 901 Index linked income protection claims in payment 16 16 901 Index linked income protection claims in payment (GLLA) 202 1897 1897 905 Index linked annuity(cpa) - PLL AlbaWP 21 214 214 214

139 Long-term insurance business : Valuation summary of index linked contracts Form 54 Subfund Non-Profit Fund Units 000 UK Life / Reinsurance ceded intra-group Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 901 Index linked income protection claims in payment (GLLA) 168 1476 1476

140 Long-term insurance business : Valuation summary of index linked contracts Form 54 Subfund Non-Profit Fund Units 000 UK Pension / Gross Product code number Product description Number of policyholders / scheme members benefit annual office premiums Nominal value of units Discounted value of units Other liabilities 1 2 3 4 5 6 7 8 9 mathematical reserves 905 Index linked annuity(cpa) - NPLL 474 1325 14465 14465 14465 905 Index linked annuity(cpa) - Pearl 403 729 21641 21641 21641 905 Index linked annuity(cpa) - PLL 1541 3949 65436 65436 65436 905 Index linked annuity(cpa) - PLL AlbaWP 380 6094 6094 6094 905 Index linked annuity(cpa) - PLL PhnWP 348 6744 6744 6744 905 Index linked annuity(cpa) - PLL SALWP 1626 28816 28816 28816

141 Long-term insurance business : Unit prices for internal linked funds Form 55 Total business Units 000 Fund name Type of fund Net assets Main series Unit management charge Price at previous valuation date Price at current valuation date 1 2 3 4 5 6 7 8 Change in price during year Choices - Managed 12 - individual pension - balanced managed fund 1055236 1.00 5.8650 6.0820 3.70 GLLA - Managed 02 - life - balanced managed fund 314296 0.75 16.9448 17.6850 4.37 Freedom - Managed 02 - life - balanced managed fund 120847 0.75 3.3882 3.5398 4.47

Long-term insurance business: Analysis of valuation interest rate Form 57 Subfund With Profits Fund Units 000 Product group 1 Net mathematical reserves Net valuation interest rate Gross valuation interest rate Risk adjusted yield on matching assets 2 3 4 5 WP UKL F51 181004 2.10 2.63 3.17 NP UKL F51 (i) 15720 2.10 2.63 3.17 NP UKL F51 (ii) 10819 2.60 2.60 3.20 WP UKP F51 277644 2.60 2.60 3.20 NP UKP F51 35989 2.60 2.60 3.20 UKL F52 28087 2.00 2.50 3.42 UKP F52 (i) 351891 2.00 2.00 3.42 UKP F52 (ii) 75370 1.60 1.60 2.16 MISC 73791 n/a n/a n/a Total 1050315 142

Long-term insurance business: Analysis of valuation interest rate Form 57 Subfund Non-Profit Fund Units 000 NP UKL F51 annuity non-profit Product group 1 Net mathematical reserves Net valuation interest rate Gross valuation interest rate Risk adjusted yield on matching assets 2 3 4 5 8234 2.31 2.31 2.68 NP UKL F51 annuity non-profit (PLL WP) 1532 2.15 2.15 2.78 NP UKL F51 income protection 10254 n/a 1.90 2.11 NP UKP F51 annuity and deferred annuity non-profit 2925490 n/a 2.31 2.68 NP UKP F51 annuity non-profit (NPL/Pearl/PLL) 4333524 n/a 2.65 3.05 NP UKP F51 annuity non-profit (PLL WP) 1758576 n/a 2.15 2.78 NP UKP F51 annuity non-profit (GPM) 65705 n/a 2.81 3.00 NP UKP F54 (NPL/Pearl/PLL) 101543 n/a 2.65 3.05 NP UKP F54 (PLL WP) 41868 n/a 2.15 2.78 MISC 24594 n/a n/a n/a Total 9271319 143

Long-term insurance business: Analysis of valuation interest rate Form 57 Subfund Permanent Health Fund Units 000 Product group 1 Net mathematical reserves Net valuation interest rate Gross valuation interest rate Risk adjusted yield on matching assets 2 3 4 5 UK PHI Reg Premium F51 Discounted 192 n/a 1.00 1.46 UK PHI F51 Claims in Payment 7075 n/a 2.00 2.15 UK PHI F51 Non-Discounted 32 n/a n/a n/a OS PHI F51 Non-Discounted 289 n/a n/a n/a Total 7588 144

Form 58 Long-term insurance business : Distribution of surplus Total business Summary Units 000 Financial year Previous year 1 2 Valuation result Fund carried forward 11 12686907 10332813 Bonus payments in anticipation of a surplus 12 88857 110787 Transfer to non-technical account 13 170642 325017 Transfer to other funds / parts of funds 14 Subtotal (11 to 14) 15 12946406 10768616 Mathematical reserves 21 12294611 9900737 Surplus including contingency and other reserves held towards the capital requirements (deficiency) (15-21) 29 651795 867880 Composition of surplus Balance brought forward 31 425593 357551 Transfer from non-technical account 32 Transfer from other funds / parts of fund 33 60350 Surplus arising since the last valuation 34 226202 449979 Total 39 651795 867880 Distribution of surplus Bonus paid in anticipation of a surplus 41 88857 110787 Cash bonuses 42 Reversionary bonuses 43 6922 6483 Other bonuses 44 Premium reductions 45 Total allocated to policyholders (41 to 45) 46 95778 117270 Net transfer out of fund / part of fund 47 170642 325017 Total distributed surplus (46+47) 48 266420 442286 Surplus carried forward 49 385374 425593 Total (48+49) 59 651795 867880 Percentage of distributed surplus allocated to policyholders Current year 61 Current year - 1 62 Current year - 2 63 Current year - 3 64 145

Form 58 Long-term insurance business : Distribution of surplus Subfund With Profits Fund Units 000 Financial year Previous year 1 2 Valuation result Fund carried forward 11 2554805 2591697 Bonus payments in anticipation of a surplus 12 88857 110787 Transfer to non-technical account 13 10642 13030 Transfer to other funds / parts of funds 14 Subtotal (11 to 14) 15 2654304 2715514 Mathematical reserves 21 2547380 2584671 Surplus including contingency and other reserves held towards the capital requirements (deficiency) (15-21) 29 106924 130843 Composition of surplus Balance brought forward 31 544 576 Transfer from non-technical account 32 Transfer from other funds / parts of fund 33 Surplus arising since the last valuation 34 106381 130267 Total 39 106924 130843 Distribution of surplus Bonus paid in anticipation of a surplus 41 88857 110787 Cash bonuses 42 Reversionary bonuses 43 6922 6483 Other bonuses 44 Premium reductions 45 Total allocated to policyholders (41 to 45) 46 95778 117270 Net transfer out of fund / part of fund 47 10642 13030 Total distributed surplus (46+47) 48 106420 130300 Surplus carried forward 49 504 544 Total (48+49) 59 106924 130843 Percentage of distributed surplus allocated to policyholders Current year 61 90.00 90.00 Current year - 1 62 90.00 90.00 Current year - 2 63 90.00 90.00 Current year - 3 64 90.00 90.00 146

Form 58 Long-term insurance business : Distribution of surplus Subfund Non-Profit Fund Units 000 Financial year Previous year 1 2 Valuation result Fund carried forward 11 10123407 7731086 Bonus payments in anticipation of a surplus 12 Transfer to non-technical account 13 159000 310987 Transfer to other funds / parts of funds 14 Subtotal (11 to 14) 15 10282407 8042072 Mathematical reserves 21 9739643 7308166 Surplus including contingency and other reserves held towards the capital requirements (deficiency) (15-21) 29 542764 733906 Composition of surplus Balance brought forward 31 422920 353906 Transfer from non-technical account 32 Transfer from other funds / parts of fund 33 60350 Surplus arising since the last valuation 34 119844 319650 Total 39 542764 733906 Distribution of surplus Bonus paid in anticipation of a surplus 41 Cash bonuses 42 Reversionary bonuses 43 Other bonuses 44 Premium reductions 45 Total allocated to policyholders (41 to 45) 46 Net transfer out of fund / part of fund 47 159000 310987 Total distributed surplus (46+47) 48 159000 310987 Surplus carried forward 49 383764 422920 Total (48+49) 59 542764 733906 Percentage of distributed surplus allocated to policyholders Current year 61 Current year - 1 62 Current year - 2 63 Current year - 3 64 147

Form 58 Long-term insurance business : Distribution of surplus Subfund Permanent Health Fund Units 000 Financial year Previous year 1 2 Valuation result Fund carried forward 11 8695 10030 Bonus payments in anticipation of a surplus 12 Transfer to non-technical account 13 1000 1000 Transfer to other funds / parts of funds 14 Subtotal (11 to 14) 15 9695 11030 Mathematical reserves 21 7588 7900 Surplus including contingency and other reserves held towards the capital requirements (deficiency) (15-21) 29 2106 3130 Composition of surplus Balance brought forward 31 2130 3068 Transfer from non-technical account 32 Transfer from other funds / parts of fund 33 Surplus arising since the last valuation 34 (23) 62 Total 39 2106 3130 Distribution of surplus Bonus paid in anticipation of a surplus 41 Cash bonuses 42 Reversionary bonuses 43 Other bonuses 44 Premium reductions 45 Total allocated to policyholders (41 to 45) 46 Net transfer out of fund / part of fund 47 1000 1000 Total distributed surplus (46+47) 48 1000 1000 Surplus carried forward 49 1106 2130 Total (48+49) 59 2106 3130 Percentage of distributed surplus allocated to policyholders Current year 61 Current year - 1 62 Current year - 2 63 Current year - 3 64 148

149 Long-term insurance business : With-profits payouts on maturity (normal retirement) Form 59A Original insurer Guardian Assurance Date of maturity value / open market option 01 March 2015 Category of with-profits policy Original term (years) Maturity value / open market option Terminal bonus MVA CWP / UWP MVA permitted? Death benefit 1 2 3 4 5 6 7 8 Endowment assurance 10 n/a n/a n/a n/a n/a n/a Endowment assurance 15 n/a n/a n/a n/a n/a n/a Endowment assurance 20 n/a n/a n/a n/a n/a n/a Endowment assurance 25 42711 19667 n/a CWP N 42711 Regular premium pension 5 n/a n/a n/a n/a n/a n/a Regular premium pension 10 n/a n/a n/a n/a n/a n/a Regular premium pension 15 n/a n/a n/a n/a n/a n/a Regular premium pension 20 93454 38392 n/a UWP N 93454 Single premium pension 5 n/a n/a n/a n/a n/a n/a Single premium pension 10 n/a n/a n/a n/a n/a n/a Single premium pension 15 n/a n/a n/a n/a n/a n/a Single premium pension 20 56747 39218 n/a UWP N 56747

150 Long-term insurance business : With-profits payouts on surrender Form 59B Original insurer Guardian Assurance Date of surrender value 01 March 2015 Category of with-profits policy Duration at surrender (years) Surrender value Terminal bonus MVA CWP / UWP MVA permitted? Death benefit 1 2 3 4 5 6 7 8 Endowment assurance 5 n/a n/a n/a n/a n/a n/a Endowment assurance 10 n/a n/a n/a n/a n/a n/a Endowment assurance 15 n/a n/a n/a n/a n/a n/a Endowment assurance 20 n/a n/a n/a n/a n/a n/a With-profits bond 2 n/a n/a n/a n/a n/a n/a With-profits bond 3 n/a n/a n/a n/a n/a n/a With-profits bond 5 n/a n/a n/a n/a n/a n/a With-profits bond 10 n/a n/a n/a n/a n/a n/a Single premium pension 2 n/a n/a n/a n/a n/a n/a Single premium pension 3 n/a n/a n/a n/a n/a n/a Single premium pension 5 n/a n/a n/a n/a n/a n/a Single premium pension 10 n/a n/a n/a n/a n/a n/a

Long-term insurance capital requirement Global business Units 000 LTICR factor Insurance death risk capital component Life protection reinsurance 11 0.0% Gross reserves / capital at risk Net reserves / capital at risk Reinsurance factor LTICR Financial year Form 60 LTICR Previous year 1 2 3 4 5 6 Classes I (other), II and IX 12 0.1% 106031 106031 98 164 Classes I (other), II and IX 13 0.15% 74075 69529 0.93 103 117 Classes I (other), II and IX 14 0.3% 1892533 1741828 5252 5509 Classes III, VII and VIII 15 0.3% 1664677 1551974 0.93 4656 5088 Total 16 3737317 3469361 10109 10878 Insurance health risk and life protection reinsurance capital component Class IV supplementary classes 1 and 2 and life protection reinsurance Insurance expense risk capital component Life protection and permanent 31 0% health reinsurance 21 2206 2227 Classes I (other), II and IX 32 1% 11176265 9756839 0.87 97568 73588 Classes III, VII and VIII (investment risk) Classes III, VII and VIII (expenses fixed 5 yrs +) Classes III, VII and VIII (other) 33 1% 788523 788523 1.00 7885 7386 34 1% 15755 15755 1.00 158 176 35 25% 1857 2474 Class IV (other) 36 1% 51598 37090 0.85 439 450 Class V 37 1% Class VI 38 1% Total 39 107907 84074 Insurance market risk capital component Life protection and permanent 41 0% health reinsurance Classes I (other), II and IX 42 3% 11176265 9756839 0.87 292705 220765 Classes III, VII and VIII (investment risk) Classes III, VII and VIII (expenses fixed 5 yrs +) Classes III, VII and VIII (other) 43 3% 788523 788523 1.00 23656 22158 44 0% 15755 15755 45 0% 1705757 1705755 Class IV (other) 46 3% 51598 37090 0.85 1316 1349 Class V 47 0% Class VI 48 3% Total 49 13737898 12303962 317677 244272 Long term insurance capital requirement 51 437899 341451 151

Returns under the Accounts and Statements Rules Supplementary Notes to the Return *0101* Section 148 Waivers The Financial Services Authority, on the application of, made a direction in February 2013 under section 148 of the Financial Services and Markets Act 2000. The direction applies in relation to the general insurance business transferred to Guardian Assurance Limited by AEGON Insurance Company (UK) Limited on 30 September 2002 only. The effect of the direction is to waive the requirements of IPRU (INS) rules 9.17 and 9.19 entirely, and to modify the application of IPRU (INS) rules 9.25(2) and 9.27(2) and Appendix 9.2(11) in relation to that business. See the relevant direction (#1574563) for details. *0201* Section 148 Waiver The Financial Services Authority, with the consent of, made a direction in March 2002 under section 148 of the Financial Services and Markets Act 2000. The effect of the direction is to allow to match certain Limited Price Index liabilities predominantly with fixed interest securities and to report the liabilities under such contracts on Form 51 and not on Form 54. The PRA, on the application of the firm, made a direction under section 138 of the Financial Services and Markets Act 2000 in February 2014. *0204* Adjusted solo return In 2013 acquisition of Ark Life secured all required regulatory approvals by May 2014, a regulated related undertaking. As a result the return has been prepared on an adjusted solo basis for the financial year ended 31 December 2014. *0301* Net admissible asset reconciliation 2014 2013 000 000 F13 L89 OLTB Grand total of admissible assets 582,054 482,745 F13 L89 LTB Grand total of admissible assets 14,811,502 12,429,640 F14 L11 Mathematical reserves, after distribution of (12,301,531) (9,907,217) surplus F14 L49 Total other insurance and non insurance liabilities (890,347) (690,050) F15 L69 Total (18,166) (6,632) F2 L35 Capital resource requirement of regulated - related undertakings 81,013 Sub Total 2,264,525 2,308,486 Rounding 1 (1) F3 L79 Total Capital resources after deductions 2,264,526 2,308,485 *0303* Allocation of Capital There has been no material change in the allocation of capital items between the General insurance business and the Long Term Insurance Business during 2014. *0310* Details of Valuation Differences Positive valuation differences within Line 14 can be broken down as follows: 2014 2013 000 000 Mathematical reserve differences in 1,083,859 1,146,810 respect of With Profits Fund Deferred taxation 3,940 3,760 PVIF taxation 7,074 8,428 Liability valuation difference 79 Asset valuation difference in respect of overseas unquoted insurance company (34,633) (38,560) Total 1,060,240 1,120,517 152

Returns under the Accounts and Statements Rules Supplementary Notes to the Return *0313* Reconciliation of movement in Profit and Loss Account and Other Reserves 2014 000 Form 3 Line 12: 2014 793,107 Form 3 Line 12: 2013 (638,875) Movement in the year 154,232 Transfer from LTB revenue account 170,642 LTB profit in IFRS financial statements (237,101) Form 16 Line 59 (Retained profit and loss for year) 87,773 *1304* OLTB: Amounts set off Amounts due to and from any one person have been offset, where appropriate in accordance with Generally Accepted Accounting Principles. *1305* OLTB: Maximum Counterparty limit There are no separate limits relating to the shareholders fund - the limits detailed in supplementary note 1319 below apply to the combination of long term and shareholders funds. *1306* OLTB: Exposure at Year End to large Counterparties At the valuation date, when shareholder and policyholder assets are taken together, there were no large exposures to individual counterparties. *1308* LTB: Aggregate value of certain investments The Company held unlisted investments valued at 696,975,063. The Company also held listed investments, deemed not readily realisable valued at 827,080,666, 718,420,767 of which was in the form of a floating rate note, the remainder being fixed interest bonds. The Company held no reversionary interests or remainders. *1309* LTB: Aggregate value of Hybrid Securities The Company held hybrid securities valued at 1,056,678,066. *1310* LTB: Amounts set off Amounts due to and from any one person have been offset, where appropriate in accordance with Generally Accepted Accounting Principles. *1312* LTB: Exposure at Year End to large Counterparties At the valuation date there were no large exposures to individual counterparties. *1313* LTB: Rights over Collateral The aggregate value of rights to which INSPRU 2.1.35R relates is 340.2m. 153

Returns under the Accounts and Statements Rules Supplementary Notes to the Return *1318* LTB: Other asset adjustments Within Form 13 Line 101 there are values of: 2014 2013 000 000 Linked derivatives categorisation difference 6,837 9,606 Collateral 336,233 35,331 Linked creditors within Form 14 (536) 4,883 Categorisation differences 265 191 Carrying value of regulated related - - undertakings in financial statements less core tier one capital of regulated related undertakings as per F3 L16 Asset valuation difference in respect of 34,633 38,560 overseas unquoted insurance company Rounding (3) 1 Total Form 13 Line 101 377,429 88,572 OLTB: Other asset adjustments Within Form 13 Line 101, there are categorisation differences in respect of a tax asset of ( 1,856,000) (2013: tax asset ( 429,000)). Valuation techniques using unobservable inputs have been used in order to value a holding in an overseas unquoted insurance company. A valuation deduction of the 34.63m has been applied to the IFRS valuation for Pillar 1 reporting. *1319* LTB: Maximum Counterparty limit The Company s Investment Guidelines and exposure limits as they relate to assets managed by Kames Capital plc are as follows. All percentages refer to business amount (non-linked business). There are no exposure limits restricting the investment operation of internal linked funds. Asset Class Exposure Limits by Counterparty Non-Linked Business Equities: 2.5% Aggregate in single name Equity, Preference Shares & Fixed Interest Securities : 5.0% LTB: Maximum Counterparty limit Deposit Exposure Limits by Credit Rating Lower of Moody s Rating (or equivalent) % Limit Value m AAA 10.0% 100 AA3 or above 10.0% 50 A3 or above 10.0% 25 Below A3 10.0% 10 There were no breaches of internal exposure limits during the year. The Company s Investment Guidelines and exposure limits as they relate to assets managed by Ignis Asset Management are as follows: 154

Returns under the Accounts and Statements Rules Supplementary Notes to the Return Internal parameters maximum limits for individual holdings: Credit Holdings AAA < 8% AA < 7% A < 5% BBB < 2.5% BB < 2% B or below = 0% Sovereign/ Gilts/ Government backed/ Exempt (Government Guarantee) A maximum 10% in total can be held in this segment. Holdings must not be rated below A. The following rating requirements apply at a country level. AAA: 10% AA: 7% A: 5% A maximum of 10% can be held in Gilts regardless of their rating. There were no breaches of internal exposure limits during the year. The Company s Investment Guidelines and exposure limits as they relate to assets managed by BlackRock are as follows: Asset Allocation: a. Governments 100% b. Corporate and Covered Bonds 100% c. Gov t Related/Guaranteed/Agency/Supra 25% d. Asset Backed (ABS/WBS/MBS/CMBS) 35% e. Inflation linked bonds 20% f. Non-base currency bonds 20% g. Cash/cash equivalents 10% Securities must be rated at least BB/Ba2 or better at time of purchase Counterparty exposure limit: a. Maximum outstanding amount for single issuer limited to 5% b. Other issuer limits apply for each rating/sector: i. UK/US Government (and Guaranteed) 100% ii. AAA Government/Related/Guaranteed/Supra 10% iii. All other AAA issuers 5% iv. All AA issuers 5% v. All A issuers 4% vi. All BBB and non-rated issuers 2% vii. All Sub BBB issuers 1% There were no breaches of internal exposure limits during the year. Company s Investment Guidelines and exposure limits as they relate to assets managed by Met Life are as follows: Asset Allocation: a. Portfolio of infrastructure debt private placement investments. 155

Returns under the Accounts and Statements Rules Supplementary Notes to the Return Counterparty exposure limit: a. Maximum investment per issuer 60m or 20% of the Initial Target Amount b. Issuer must hold at least one investment grade rating at time of issuance from a recognised rating agency (Moody s, Standard & Poor s, Fitch, Kroll, DBRS) Investment must have credit quality of MBaa3 (MetLife s equivalent of BBB-) and above. There were no breaches of internal exposure limits during the year. Company s Investment Guidelines and exposure limits as they relate to assets managed by Renshaw Bay are as follows: Asset Allocation: a. Portfolio of commercial real estate loans with concentration limits on fully invested portfolio of 350m of: i. Multi family residential (incl. student housing) 75% ii. Office 100% iii. Retail 50% iv. Industrial and logistics 50% v. Hotel and hospitality 50% vi. Other property types 15% Counterparty exposure limit: a. Maximum investment per sponsor 25% of fully invested portfolio of 350m b. Maximum individual loan size of 50m (unless approved by Guardian) c. Issuer must hold at least one investment grade rating at time of issuance from a recognised rating agency (Moody s, Standard & Poor s, Fitch, Kroll, DBRS) Investment must have credit quality of MBaa3 (MetLife s equivalent of BBB-) and above. There were no breaches of internal exposure limits during the year. *1401* Provision for reasonably foreseeable adverse variations (F14L41) To meet the requirements of GENPRU 1.3.30R to GENPRU 1.3.33R, the firm generally uses current market data at the valuation point and where this is not available fair value pricing principles are employed. The insurer has no obligations or potential obligations to which INSPRU 3.2.17R to INSPRU 3.2.18R apply. *1402* Liabilities (a) The Company has a Bond and Floating Charge granted to Countrywide Assured plc on 23 October 2006, in respect of reinsurance contracts ( relating to unit linked business, with-profits business and other classes of insurance business ) between the Company and Countrywide Assured plc. (b) As at 31st December 2014 4,818,000 has been set aside for tax on capital gains not yet realised. Full provision has been made for taxation which might be payable if the assets were sold at the values at which they are included in Form 13. (c) The Company has established a provision of 6m in respect of the mis-selling of personal pension business. The provision covers the completion of the last few remaining cases, guarantees given on certain cases and the winding up of the investigating unit. The Company has also established a provision of 2.5m in respect of complaints arising from past sales of mortgage endowments. (d) The Company has no guarantees, indemnities or other contractual commitments effected other than in the ordinary course of insurance business and in respect of related companies. (e) The Company is not aware of any fundamental uncertainties affecting its business. 156

Returns under the Accounts and Statements Rules Supplementary Notes to the Return *1405* Other adjustments to liabilities (F14L74) Within Form 14 Line 74 there are values of: 2014 2013 000 000 Mathematical reserves 1,083,859 1,146,810 Linked derivatives categorisation differences 6,837 9,606 Collateral 336,233 35,331 Linked creditors within Form 14 (536) 4,883 Other categorisation differences 265 191 Deferred tax liability 3,940 3,760 PVIF tax - IFRS valuation 7,074 8,428 Reserves valuation difference - 79 Rounding (2) 1 Total Form 14 Line 74 1,437,670 1,209,089 *1407* Longevity swap contract During the 2012 the Company entered into reinsurance arrangements with RGA Global Reinsurance Co Ltd and RGA International Reinsurance Co Ltd. The arrangements were in respect of annuity business reinsured from the Phoenix group. The reinsurance was in the form of a swap, where the Non-Profit Fund ceded longevity exposure in excess of its best estimate longevity assumptions. The fixed leg liability of the swap contract was valued at 359.9m at 31 December 2014 (2013: 336.2m) and reported within line 38 of Form 14. *1501* Provision for reasonably foreseeable adverse variations (F15L61) To meet the requirements of GENPRU 1.3.30R to GENPRU 1.3.33R the firm generally uses current market data at the valuation point and where this is not available fair value pricing principles are employed. The insurer has no obligations or potential obligations to which INSPRU 3.2.17R to INSPRU 3.2.18R apply. *1502* Liabilities (a) There were no charges over assets. (b) Deferred taxation on unrealised gains has been provided where it is considered that a liability will arise in the future. For other than long term business this provision within Form 15 was Nil. If taxation had been charged on the full amount of unrealised gains and other timing difference the additional provision required would have been approximately Nil. (c) The Company has no contingent liabilities. (d) The Company has no guarantees, indemnities or other contractual commitments effected other than in the ordinary course of insurance business and in respect of related companies. (e) The technical provisions include claims provisions for liability risks in respect of potential claims over which there is considerable uncertainty as to the amounts at which they will be settled. The uncertainty arises from the long tail nature of some of the business written, future legislation and the outcome of pending and future litigation. The level of technical provisions has been set on the basis of the information which is currently available including potential loss advices, experience of development of similar claims and case law, having regard to expenses and related investment income. Whilst it is considered that the gross provision for claims and the related reinsurance recoveries are fairly stated on the basis of the information currently available, the ultimate liability will vary as a result of subsequent information and events and may result in significant adjustments to the amount currently provided. Adjustments to the amount of provisions will be reflected in the financial statements for the period in which they are made. *1507* OLTB: Other Adjustments to Liabilities Within Line 83 of Form 15 there are categorisation differences in respect of a tax asset of ( 1,856,000) (2013: tax asset ( 429,000)). 157

Returns under the Accounts and Statements Rules Supplementary Notes to the Return *1601* Basis of foreign currency conversion Income and expenditure receivable and payable in a currency other than sterling is converted to sterling at the rates ruling at the date of the transaction. Income and expenditure of overseas branches and agencies is translated at average rates throughout the year. *1603* Other income and charges (F16L21) 2014 2013 000 000 Income: Exchange gains 4 - Release of provision 2,400 - Charges: Exchange losses (18) (113) Administration expenses - (2,500) Total Other Income and Charges (F16L21) 2,386 (2,613) The 2.4 million income (2013: nil) is in respect of a release in provision previously paid in respect of a potential liability to a third party. *1700* Form 17 has not been prepared for Other than Long Term insurance business and Permanent Health as no derivative instruments were held for these sub-funds. *1701* The aggregate amount of excess variation margin needed to be repaid due to underlying market movements is 11.2m (2013: nil). Variation margin of 2.7m (2013: nil) has been included in Form 13 line 44. *1901* The difference between Form 48 Line 29 and Form 19 Line 11 for the With Profits category of assets is due to surplus linked assets of the fund and Form 52 non unit liabilities. *20Aa* General insurance risk categories allocated under rule 9.14B There are no contracts of insurance that fall within the description of more than one risk category. *20Ab* General insurance contracts against risk of death or injury to passengers Risk categories 331, and 540 include contracts covering risk of death or injury to passengers. *20Ac* General insurance risk categories 187, 223, 400 and 700 There are no contracts of insurance under risk categories 187, 223, 400 or 700. *20Ad* General insurance claims made and not claims made policies There are no risk categories where the amounts reported in Form 20A contain both claims-made policies and policies that are no claims-made. *20Ae* General insurance facultative business under category 002 Of the amounts shown under category 002, 205,452 of the reported and 111,939 of incurred but not reported provision for gross claims is in respect of facultative business. *20Af* General insurance risk categories 113, 274 and 343 Business recorded against risk category 274 all falls within Group number 6 of Annex 11.2 Part II. There are no entries against risk categories 113 or 343. *20Ah* General insurance transfer business There was no transfer of general insurance business during the financial year. *20Ai* General insurance Forms 20, 20A, 24 & 25 All of the provisions recorded on Form 20A arise from policies transferred to Guardian Assurance Limited by AEGON Insurance Company (UK) Limited on 30 September 2002. 158

Returns under the Accounts and Statements Rules Supplementary Notes to the Return *20Aj* General insurance cessation of business No new contracts of insurance have been written since 30 September 1994, other than risks attaching to contracts in place at that time. *20Ak* General insurance amounts excluded from the revenue account There are no amounts excluded from the revenue account. *20Al* Comparison with Form 11 Line 1 column 1 of Form 20A is identical to line 11 column 1 of Form 11. *2003* Contracts of insurance The general insurance business of the Company is in run off and no new contracts of insurance have been written since 30 September 1994, other than risks attaching to contracts in place at that date. *2100* Analysis of premiums Form 21 is not required as the Company reports by underwriting year accounting. *2200* Analysis of claims and expenses Form 22 is not required as the Company reports by underwriting year accounting. *2300* Analysis of net claims and premiums Form 23 is not required as the Company reports by underwriting year accounting. *2402* Underwriting year accounting Underwriting year accounting is used for the General Insurance business transferred to the firm on 30 September 2002 by AEGON Insurance Company (UK) Limited ( AIC ). This business is longtail as there may be long delays between the occurrence, notification and settlement of the claims. In accordance with Waiver 1574563 the business will be taken to have incepted on their inception dates with AIC and not on the date of their transfer. The business is in run-off and no new contracts of insurance have been written since 30 September 1994. *2404* Claims management expenses and other costs All administrative expenses have been allocated to line 43 and have been nominally spread by reporting category in the ratio of paid claims for the year. *2405* Carried forward claims management costs On 11 September 2014, Guardian entered into a loss portfolio transfer reinsurance agreement to provide Guardian with 100% quota share reinsurance for the General Insurance liabilities. Claims management is provided by the reinsurer and under the terms of the reinsurance agreement they incur the claims management costs. *2406* Acquisition expenses The exchange movements arising from the revaluation of assets have been allocated to line 42 and have been nominally spread by accounting class in the ratio of the closing gross claim provision. *2407* Section 148 Waiver By virtue of the waiver referred to in supplementary note 0101, the policies transferred from AEGON Insurance Company (UK) Ltd on 30 September 2002 are taken to have incepted on the inception dates of those policies with AEGON Insurance Company (UK) Ltd and not the date of the transfer. *2501* Unearned Premiums The business reported in Form 25 is in run off, therefore an unearned premium reserve is not applicable. *2600* Analysis of treaty net claims and premiums Form 26 is not required under a Section 148 Modification. *2700* Analysis of treaty gross claims and premiums Form 27 is not required under a Section 148 Modification. 159

Returns under the Accounts and Statements Rules Supplementary Notes to the Return *2800* Analysis of premiums, claims and expenses Form 28 is not required under a Section 148 Modification. *2900* Analysis of technical provisions Form 29 is not required under a Section 148 Modification. *3000* Expected income and yield from assets covering discounted provisions The technical provisions are not discounted (see note 2405 above). Hence, Form 30 is not required. *3100* Analysis of direct and facultative gross business Form 31 is not required under a Section 148 Modification. *3200* Analysis of direct and facultative motor gross business Form 32 is not required under a Section 148 Modification. *3400* Analysis of gross claims and premiums Form 34 is not required under a Section 148 Modification. *3600* Currency rates As all Forms have been prepared in sterling, Form 36 is not required. *3700* Equalisation provisions The general insurance business is in run off and the level of premium income for setting equalisation provisions has fallen below the statutory limit for setting such provisions. Form 37 is not required. *3800* Equalisation provisions technical account See note 3700. Form 38 is not required. *3900* Equalisation provisions technical account See note 3700. Form 39 is not required. *4002* Other income and expenditure Other Income of 4,891,000 relates to the receipt of annual management charges on linked pension business reassured to Scottish Equitable plc. *4004* Business transfer In 2013, Line 31 of Form 40 refers to the business transferred into the Non-Profit Fund of Guardian Assurance Limited in respect of the Part VII transfer from Guardian Linked Life Limited and Guardian Pensions Management Limited. All admissible assets and liabilities were transferred at book value. *4006* Allocation of income and expenditure The Company has produced a form 40 for each of the With Profits Fund, Non-Profit Fund and Permanent Health Fund. The investment income and gains and losses have been allocated to the respective funds with reference to actual assets held in the respective funds. Expenses and taxation not directly attributable to each class of business has also been allocated to each fund based on the asset share of the respective funds. *4008* Management Services The management services are provided by Guardian Companies Services Limited which are recharged to the Company. There are management agreements in place with Kames Capital plc, Ignis Asset Management, Blackrock, Castle Hill, MetLife Investment Management and Renshaw Bay for the provision of investment management services. Capita, Diligenta and HCL service and administer annuity business on behalf of Guardian. 160

Returns under the Accounts and Statements Rules Supplementary Notes to the Return *4009* Material Connected-Party Transactions During the year 2013, the entire long term business of Guardian Linked Life Assurance Limited and Guardian Pensions Management Limited was transferred into the Non-Profit Fund of the Company under a Part VII business transfer. There were no material connected party transactions during the year in excess of 5% of the net long term business liabilities of the Company. *4010* Investment Income Receivable Form 40 Line 12 includes unit linked investment income of 51,589,000. *4401* Basis for determining Asset Value in internal linked funds Assets have been valued on a bid market value basis. *4402* Derivative Contracts/Rights & Liabilities in internal linked funds The Company held derivative contracts rights valued at 9,735,000 and derivative contracts liabilities valued at 7,829,000. The Company did not hold any stock warrants. *4404* Surplus units statement The linked deficit of 835,000 arises from timing differences and the operation of a daily box position. *4502* Other Income and Expenditure 2014 2013 000 000 Other Income Management fee rebates 1,945 1,201 Unit linked pension reassurance capture - 1,299,562 Unit linked business transfer under internal Part - 435,727 VII Fund accounting transition opening balance 112 adjustment Misc income 5-2,062 1,736,490 Other Expenditure Misc charges 67 15 Option charges - 6 Bank charges - 3 Custodian fees 179 4 Investment expenses - 126 Fund accounting transition opening balance adjustment 39 285 154 *4803* For those securities, where the issuer has an option to redeem at a fixed date or re-finance on a fixed spread over a reference bond, the yield is calculated on the assumption that the issuer will redeem at the fixed date. *4806* The investment returns shown in Form 48 Lines 21 to 29 column 5 are based on the total assets held in the With Profits Fund. *4807* The difference between Form 48 Line 29 and Form 19 Line 11 for the With Profits Fund category of assets is due to surplus linked assets of the fund and Form 52 non unit liabilities. *4901* Disclosure of rating agency used We use a composite rating based on ratings from the 3 main agencies (Moody s, Standard & Poor s and Fitch). Where no external issue ratings are available, an internal rating will be used. 161

Returns under the Accounts and Statements Rules Supplementary Notes to the Return *5001* In Form 58 the With Profits Fund reserves at Line 21 have been reduced to reflect the reassurance of 2.431m of the Reversionary Bonus at Line 43 to the Non-Profit Fund. The mathematical reserves shown in Line 48 of Form 50 for the With Profits Fund are therefore 2.431m higher than the mathematical reserves shown in Line 21 of Form 58. This difference also applies to the Summary Forms 50 and 58. *5101* The number of direct written group schemes is as follows: Product With Profits Fund UKL UKP OS 175 Group conventional deferred annuity with profits 1 175 Group conventional deferred annuity with profits 8 chargeable rates 175 Group conventional deferred annuity with profits 7 Pension Plus 410 Group life 16 410 Group life GSB 30 411 Group death in service dependants annuities 3 415 Collective life 2 *5102* It has been assumed that the number of individual policyholders is the number of individual policies. *5105* The Form 51 Pension intra-group reinsurance of With Profits Fund product code 165 is accepted in the Non-Profit Fund under product code 390. This treatment recognises that the reinsurance between the funds is on a non-profit basis. *5106* The Form 51 Pension external reinsurance of NPLL (National Provident Life Limited) and PLL (Phoenix Life Limited) annuities in payment covers gross business on both Forms 51 and 54. Where it is in respect of business on Form 54 this is because the reinsurance is on a fixed escalating basis even though the underlying main benefit is index-linked. *5201* The number of direct written group schemes is as follows: Product With Profits Fund UKL UKP OS 555 Group deposit administration with profits - 5 DPA 555 Group deposit administration with profits - Pension Saver 104 *5202* It has been assumed that the number of individual policyholders is the number of individual policies except where a number of mini-policies have been sold in a cluster, in which case the cluster has been counted as individual policyholder. *5205* The reserves for the UK life reinsurance ceded external have been set to zero due to the reinsurance being annually renewable and there being no obligation on Munich Re to renew. *5301* The number of direct written group schemes is as follows: Product With Profits Fund UKL UKP OS 735 Group money purchase pension property linked 4 Product Non-Profit Fund UKL UKP OS 735 Group money purchase pension property linked 4 765 Group managed fund 7 *5302* It has been assumed that the number of individual policyholders is the number of individual policies except where a number of mini-policies have been sold in a cluster, in which case the cluster has been counted as individual policyholder. *5305* The reserves for the life reinsurance ceded external have been set to zero due to the reinsurance being annually renewable and there being no obligation on Munich Re to renew. 162

Returns under the Accounts and Statements Rules Supplementary Notes to the Return *5702* The PRA, on the application of the firm, made a direction under section 138 of the Financial Services and Markets Act 2000 in February 2014. The effect of the direction is to modify the provisions of INSPRU 3.1.35R and IPRU(INS) Appendix 9.3 so that a more appropriate rate of interest is used for certain assets taken in combination. The following table shows the yields to which a risk adjustment was applied in accordance with INSPRU 3.1.35R as amended in order to arrive at the figures used in column 5 of that Form. Product group Risk adjusted yield on matching assets Yield before risk adjustment 1 5 NP UKL F51 annuity non-profit 2.68 3.14 NP UKL F51 annuity non-profit (PLL WP) 2.78 3.28 NP UKP F51 annuity and deferred annuity non-profit 2.68 3.14 NP UKP F51 annuity non-profit (NPL/Pearl/PLL) 3.05 3.86 NP UKP F51 annuity non-profit (PLL WP) 2.78 3.28 NP UKP F51 annuity non-profit (GPM) 3.00 3.65 NP UKP F54 (NPL/Pearl/PLL) 3.05 3.86 NP UKP F54 (PLL WP) 2.78 3.28 *5803* The With Profits Fund reserves at Line 21 have been reduced to reflect the reassurance of 2.431m of the Reversionary Bonus at Line 43 to the Non-Profit Fund. *6002* The net reserve shown in Line 49 of Form 60 includes an additional 2.431m as the form does not allow for the internal reassurance of cost of bonus from the With Profits Fund to the Non-Profit Fund. The figure for mathematical reserves in Line 11 of Summary Form 14 is therefore 2.431m lower than the figure shown in Line 49 of Form 60. 163

Returns under the Accounts and Statements Rules Additional Information on general insurance business: major treaty reinsurers required by rule 9.25 of the Interim Prudential Sourcebook for Insurers Global business Major Treaty Reinsurer Connection Prop. Reinsurance Treaties 000 Non-Prop Reinsurance Tr. 000 Debts outstanding included at F13L75 000 Deposit received included at F15L31 000 Anticipated recoveries 000 Comments As required by Rule 9.25: (Para 1(a)) (Para 1(b)) (Para 1(c)(i)) (Para 1(c)(ii)) (Para 1(d)) (Para 1(e)) (Para 1(f)) R&Q Insurance (Malta) Limited 3 rd Floor Development House St Ann Street Floriana FRN 9010 MALTA None 7,170 The Financial Services Authority, on the application of, made a direction in February 2008 under section 148 of the Financial Services and Markets Act 2000. The effect of the direction is to replace IPRU (INS) Rule 9.25(2) with the following: 9.25(2) For the purposes of this rule, a major treaty reinsurer is defined as any one of the insurer s top ten treaty reinsurers of general business by value of known amounts outstanding and anticipated at the end of the financial year in question. There is only 1 reinsurer, as defined with supplementary note 0101 to the return, with known amounts anticipated at the end of the year. 164

Returns under the Accounts and Statements Rules Additional Information on general insurance business: major facultative reinsurers required by rule 9.26 of the Interim Prudential Sourcebook for Insurers Global business Major Facultative Reinsurer Connection Reinsurance premiums payable 000 Debts outstanding included at F13L75 000 Deposit received included at F15L31 000 Anticipated recoveries 000 Comments As required by Rule 9.26: (Para 1(a)) (Para 1(b)) (Para 1(c)) (Para 1(d)) (Para 1(e)) (Para 1(f)) There are no major facultative reinsurance contracts within the regulatory limits 165

Returns under the Accounts and Statements Rules Additional Information on general insurance business: reinsurance cedants required by rule 9.27 of the Interim Prudential Sourcebook for Insurers Global business Major Reinsurance Cedant details As required by Rule 9.27: (Para 1(a)) Connection (Para 1(b)) Premium details premiums receivable 000 (Para 1(c)) Deposits made included at F13L57 000 (Para 1(d)) Debts outstanding included at F13L74 000 (Para 1(e)) Comments The Financial Services Authority, on the application of, made a direction in February 2008 under section 148 of the Financial Services and Markets Act 2000. The effect of the direction is to replace IPRU (INS) Rule 9.27(2) with the following: 9.27(2) For the purposes of this rule, a major cedant of the insurer is defined as any one of the insurer s top ten cedants of general insurance business by value of known amounts owed (both agreed outstanding and IBNR) at the end of the financial year in question. The above are the cedants as defined in note 0101 of the supplementary notes to the return. At 31 December 2014 there were no major cedants remaining. 166

Returns under the Accounts and Statements Rules General insurance business Additional information on business ceded required by rule 9.32 of the Interim Prudential Sourcebook for Insurers Global business The general insurance business of the Company is in run off and there were no new or modified contracts of reinsurance in the financial year. 167

Returns under the Accounts and Statements Rules General insurance business Additional information on business ceded required by rule 9.32A of the Interim Prudential Sourcebook for Insurers Global business All reinsurance contracts entered into by the Company were either on a Quota Share basis or Non-Proportional basis providing Excess of Loss cover, which included a transfer of risk to the reinsurer. The contracts do not contain the features as described in IPRU(INS)9.32B(5). Therefore there were no contracts of insurance under which general insurance business has been ceded by the insurer where: (a) the value placed on future payments in respect of the contract in the return for the financial year in question is not commensurate with the economic value provided by the contract, after taking account of the level of risk transferred; or (b) there are terms or foreseeable contingencies (other than the insured event) that have the potential to affect materially the value placed on the contract in the insurer s balance sheet at, or any time after, the end of the financial year in question. 168

Returns under the Accounts and Statements Rules Additional Information on Derivative Contracts required by rule 9.29 of the Interim Prudential Sourcebook for Insurers. (a) The Investment Guidelines operated during the year to 31 December 2014 were as follows: (i) Exchange traded Index Futures may be used in the equity and fixed interest sectors of the long term business fund for efficient portfolio management and reduction of risk up to a level of 25% of the relevant "sector" fund. (ii) Margin requirements on Futures positions are deposited with the exchange through a clearing agent. Overall exposure is limited to 25% of the relevant "sector" fund. (iii) Exchange traded puts and calls on individual share may be bought or sold consistent with the fund mandates. Options sold by the insurer must be covered. (iv) Currency forward contracts may be used to hedge overseas currency exposure. Currency options may be used as an alternative to currency forwards. Currency hedging may be occasionally achieved by using borrowings. Hedging can only be applied against currencies actually held by the insurer. (v) Over the Counter (OTC) derivatives are used only for very specific purposes consistent with the fund mandate. Where investments guarantees are given to policyholders, the guarantees may be achieved by entering into an OTC contract with an investment bank. (vi) Derivatives may be utilised within structured documented programmes that do not comply with (a)(i)-(v) above. These programmes specifically detail the way in which derivatives may be used and the funds to which they apply. The limits on the use of derivatives within such programmes are capped at 100% of the value of the fund and the use of derivatives must be in compliance with PRA rules. (b) The Investment Guidelines do not normally permit any new contracts to be bought or sold which are more than 10% out of the money (this includes over the counter options). The only exceptions are where a contract that is more than 10% out of the money is covered by an additional contract that is less than 10% out of the money, or the out of the money contract, potentially in combination with other contracts, has the effect of reducing investment risk as defined in PRA rules. The Guidelines also specifically require care to be taken so that out of the money options are not exercised and losses consequently incurred. (c) The insurer did not enter any such contracts as described in sub-paragraph (b) above during 2014. (h) No derivative contract was held at any time during the financial year which required a significant provision to be made for it under INSPRU 3.2.17R, or did not fall within the definition of a permitted derivative contract. (i) During 2014 within the linked long-term insurance fund, the insurer received a fixed consideration of 0.144m in return for granting rights under derivative contracts. The derivative contracts in question were put and call options written against both individual company holdings and standard indices. 169

Returns under the Accounts and Statements Rules Additional Information on Controllers required by rule 9.30 of the Interim Prudential Sourcebook for Insurers. Controllers From 23 November 2011, the Company s ultimate parent undertakings are the partnerships comprising the Fourth Cinven Fund, being funds managed and advised by Cinven Limited, a Company incorporated under the laws of England and Wales. Accordingly, Cinven Limited, as manager and advisor to the Cinven Funds, is the Company s ultimate controlling party. The Company structure is illustrated below in the table. Company (UK) Guardian Financial Services Holdings UK Limited (UK) Guardian Finance Limited (Jersey) Guardian Midco Limited (Jersey) Guardian One Limited (Jersey) Guardian Holdings Europe Limited (Jersey) Cinven (Fourth Fund) Ownership and voting power Wholly owned by Guardian Financial Services Holdings UK Limited which has 100% of voting power Wholly owned by Guardian Finance Limited which has 100% of voting power Wholly owned by Guardian Midco Limited which has 100% of voting power Wholly owned by Guardian One Limited which has 100% of voting power Wholly owned by Guardian Holdings Europe Limited which has 100% of voting power 82% owned by Cinven Funds which has 82% of voting power Ultimate Parent Undertaking There have been no changes in the ownership structure during the year. 170

APPENDIX 9.4 (rule 9.31(a)) ABSTRACT OF VALUATION REPORT (WITH PROFITS, NON-PROFIT & PERMANENT HEALTH FUNDS) Introduction 1 (1) The valuation date is 31 December 2014. (2) The previous valuation date was 31 December 2013. (3) No interim valuations (for the purposes of rule 9.4 of IPRU(INS)) have been carried out since the previous valuation date. (4) On 7 May 2014 Guardian Assurance acquired the Ark Life Assurance Company Limited ( Ark Life ). Ark Life is a closed life company based in Dublin and a wholly owned subsidiary of the Non-Profit Fund. (5) On 11 August 2014 Guardian completed a reinsurance of 1.7bn of annuities from Phoenix ( Ping 2 ), effective from 1 January 2014. The annuities are reinsured to the Non-Profit Fund. The business is expected to be transferred to Guardian Assurance Ltd via a business transfer scheme under Part VII of the Financial Services and Markets Act 2000 in 2015. Product Range 2 There have been no significant changes to the product range since the previous valuation. The With Profits Fund is closed to new business except by contractual increment. Discretionary charges and benefits 3 (1) Market Value Reductions have not applied since the previous valuation as the asset shares of policies exceeded the published unit value for all terms and durations. (2) There have been no changes to premiums on reviewable protection policies since the previous valuation. (3) There are no non-profit deposit administration benefits. (4) On linked policies with service charges that are expressed in monetary rather than percentage terms the service charges on the Choices range of policies increased by 0.70% since the previous valuation. Service charges on the Freedom range of policies increased by 1.90% since the previous valuation (11.5% for Freedom policies which only increase every 5 years). Administration charges on GPM Group Managed Fund business increased by 1.4%. (5) There have been no changes to benefit charges on unit-linked policies since the previous valuation. (6) No changes were made to the rates of annual management charges on unit-linked policies since the previous valuation nor to the rate of notional charge applied to unitised with-profit business. (7) The following description of unit pricing principles applies to the internal linked funds of Guardian: (a) (i) Units in the internal linked funds are created and cancelled at the net asset price. (ii) The offer price used for the allocation of units to policies is calculated as the net asset price plus a bid/offer spread. The bid price used in the cancellation of units from policies is calculated as the offer price multiplied by [1-the bid/offer spread percentage]. For Accumulation units, prices must be within the following maximum and minimum limits. The minimum bid price is obtained by dividing the number of units in issue into the net value of the relevant fund with due allowance for disposal costs. The maximum offer price is obtained similarly from the value of the relevant fund but with due allowance for acquisition costs and the result is increased by the ratio 100/95. For Initial units the maximum and minimum prices are obtained from prices for the corresponding Accumulation units after taking into account the additional management charges made. (iii) Underlying net asset prices are calculated on two bases. The higher net asset price represents the offer price of the underlying assets plus an allowance for purchase expenses. The lower net asset price represents the equivalent bid price of those underlying assets less an allowance for sale costs. A striking point is then determined between the two values according to current and expected cashflows to represent the deemed net asset price. The current and expected cashflows are reviewed each month and could be reviewed on other occasions in special circumstances. (iv) Asset valuations are based on the 12pm intra-day valuation except for property, which is priced monthly. (b) There are no circumstances where different pricing bases apply to different policies. Pricing bases vary depending on the position of the individual unit-linked funds as described above. (c) Not applicable. (8) For all funds subject to tax on capital gains, tax is deducted from the internal linked funds on a quarterly basis consistent with the tax payments made to HM Revenue & Customs. Tax is deducted in respect of realised gains and other taxable income assuming a tax rate of 20%. In respect of the notional gains on unit trusts the tax deducted is based on a rate of 20% applying to 1/7 th of the notional gain which is consistent with the Company s taxation basis. No deduction is made with respect to other unrealised gains. 171

(9) For all funds subject to tax on capital gains, tax provisions are established in respect of realised and unrealised gains at a rate of 20% of the indexed gain. For the Fixed Interest and Index Linked Gilt funds, corporation tax provisions are established in respect of realised and unrealised gains at a rate of 20% of the relevant gain. This is assessed on a mark to market basis. (10) For those funds which hold units in Kames Capital plc OEICs and BlackRock s collective investment tracker funds (BCIF), the amount of the management charge on the OEIC / BCIF is rebated to the fund and hence to the policyholders. There are no beneficial terms in respect of purchases or sales of the OEIC / BCIF holding. There are no beneficial terms on holdings in other unit trusts or OEICs. Valuation basis (other than for special reserves) 4 (1) The general principles adopted in the valuation fall into four broad subdivisions as follows: I For most categories of non-linked policies written in the With Profits Fund the reserves were calculated by deducting the present value of net premiums from the present value of benefits. The net premium for each policy is such a premium that if payable for the same period and in the same manner as the actual premium and calculated on the valuation basis would be sufficient, allowing for Zillmerisation, to provide the benefits under the policy. Benefits valued under deferred annuities are taken to be equivalent to the maximum of the guaranteed cash option, if any, and a valuation cash option. In determining the reserve it is assumed that 85% to 95% (based on term to vesting) of policyholders exercise the most onerous option. In no case was the net premium allowed to exceed 95% of the office premium or, for some classes, such lower percentage of the office premium that was considered necessary to make proper provision for future expenses. II For non-linked policies written in the Non-Profit Fund and Permanent Health Fund the reserves were calculated using a gross premium method as the total present value of future benefits plus future expenses including commission less the present value of office premiums. Where appropriate, allowance has been made for payments in accordance with reinsurance arrangements. A prudent allowance for lapses is made on some lines of protection business. Negative reserves are also permitted for protection business. For property linked policies the methods of valuation depended upon the nature of the benefits. III The reserves for Guardhill policies were calculated by deducting the present value of any future office premiums, after allowing for future expenses, from the present value of the benefits. As a general principle the reserves for other property linked policies were based on the bid value of units allocated, adjusted for actuarial funding where relevant, plus an additional non-unit reserve to avoid future valuation strain and a multiple of the monthly benefit charges for those contracts that are current costed. The unit reserve was in all cases at least as great as the surrender value. For the purpose of the non-unit reserve calculation: Income comprises premiums and expense charges (including fund charges and any benefit from the bid/offer spread) together with amounts arising from the cancellation of units. Outgo comprises the cost of units created, assumed expenses (including commission) and payments on death, maturity or illness in excess of the unit liability. IV For categories of policy that do not fall within sub-divisions I to III above, the valuation principles and methods used were: (i) (ii) Non-linked accumulating with profits policies. For non-linked accumulating with profits policies the reserve is the greater of: a) The minimum of the current benefit value, excluding any allowance for terminal bonus, and the current surrender value. b) The discounted projected benefits allowing for bonus rates consistent with the PPFM. The long-term bonus rates (net of the expense allowance for Pension Saver) assumed for this purpose were 1.50% for Unitised With Profits, 4.50% for Deposit Administration and 0.75% for Pension Saver. For Deposit Administration and Pension Saver the current benefit value was taken as the amount standing to the credit of the policyholder. This amount included any bonus interest additions made prior to the valuation date together with the accumulation of basic interest to that date. For Unitised With Profits the current benefit value was taken as the number of units attaching to the policy multiplied by the published bid price. The resultant reserve for accumulating with profits policies exceeds the current benefit value by 16,600,000. Group benefits of life assurance, group annuities payable on death-in-service to widows, widowers and other dependants, fatal accident benefits, term assurances with special terms, and certain minor risks. The reserve was generally taken to be not less than 100% of the annual office premium for regular premium policies and 90% of any single premium. 172

(iii) Chargeable rate deferred annuities. The reserve was taken as the value of the pension secured to date, no account being taken of future premiums or pension to be secured by future premiums. (iv) Group endowment, all group deferred pension policies and certain individual pension policies. (v) For group policies the valuation was based on data in force at the renewal date in 2014, but if the data was not then available the most recently available data was used. The reserve was calculated in accordance with sub-division I, but adjusted to allow for alterations up to the valuation date and increased to the extent necessary to ensure that future valuation strains would not occur in respect of future premiums. Buy-Out Plan liabilities were calculated in accordance with sub-division I for business valued in the With Profits Fund and sub-division II for business valued in the Non-Profit Fund, but were increased where the anticipated bonus guarantee applied. In general, where detailed information was not available the reserve was estimated, but in no case was it taken to be less than premiums received adjusted for outgoings and accrued interest. Permanent health insurance claims. Income protection claims in payment reserves were calculated prospectively with an appropriate allowance for future claims expenses. (vi) Risk premium reassured from Caledonian Insurance Company. In the case of risk reassured in respect of individual term and basic assurances and collective life, the reserve was taken as 10% of the risk premium for the year ending on the valuation date. The net liability for group life policies was taken as 100% of the risk premium for the year. Reserve for Extra Risks In general, the reserve for extra risks was taken to be not less than one year s additional premium per annum or 90% of any additional single premium, as appropriate, payable in respect of the extra risk. (2) The valuation interest rates, mortality & morbidity tables assumed for the 2014 and 2013 valuations were as follows. Where some lines of business are written in both the With Profits Fund and the Non-Profit Fund, the Non-Profit Fund valuation interest rate is shown in parentheses, where this differs from the With Profits Fund valuation rate. 173

Category Mortality (* Morbidity) Table Interest 2014 2013 2014 2013 BLAGAB Life Assurances Males Females Males Females % % With profits 102% AMC00 102% AFC00 84% AM92 90% AF92 2.10 2.50 Non-profit 102% AMC00 102% AFC00 84% AM92 90% AF92 2.10 2.50 Bonus reinforcement benefit 102% AMC00 102% AFC00 84% AM92 90% AF92 2.10 2.50 Term assurance smokers inc IBP 88% TMC00 92% TFC00 144% TM92 66% TF92 2.10 2.50 Term assurance non-smokers 88% TMC00 92% TFC00 54% TM92 66% TF92 2.10 2.50 Term assurance other 88% TMC00 92% TFC00 54% TM92 66% TF92 2.10 2.50 Group Scheme Benefit smokers 88% TMC00 92% TFC00 144% TM92 66% TF92 2.10 2.50 GSB non-smokers 88% TMC00 92% TFC00 54% TM92 66% TF92 2.10 2.50 GSB other 88% TMC00 92% TFC00 54% TM92 66% TF92 2.10 2.50 Genesis smokers* 130% M&G (1996) 130% M&G (1996) 2.10 2.50 Genesis non-smokers* 115% M&G (1996) 115% M&G (1996) 2.10 2.50 HomeGuard Plus smokers * 140% M&G (1996) 140% M&G (1996) 2.10 2.50 HomeGuard Plus non-smokers * 140% M&G (1996) 140% M&G (1996) 2.10 2.50 Life assurance & CI smokers* 140% M&G (1996) 140% M&G (1996) 2.10 2.50 LICI non-smokers* 140% M&G (1996) 140% M&G (1996) 2.10 2.50 Guardhill & Property Bond 102% AMC00 102% AFC00 84% AM92 90% AF92 2.00 2.00 Deferred Annuities Personal Pensions 31% AMC00 27% AMC00 24% AM92 40% AF92 2.60 3.60 Participating Pensions 31% AMC00 27% AMC00 24% AM92 40% AF92 2.60 3.60 Retirement Pensions 31% AMC00 27% AMC00 24% AM92 40% AF92 2.60 3.60 Pension Assurance with profits 50% AMC00 46% AMC00 48% AM92 40% AF92 2.60 3.60 VIP / Pension Plus with profits 50% AMC00 46% AMC00 48% AM92 40% AF92 2.60 (2.31) 3.60 (3.55) Other with profits 50% AMC00 46% AMC00 48% AM92 40% AF92 2.60 3.60 Grouped Fund/Chargeable Rates: - with profits 50% AMC00 46% AMC00 48% AM92 40% AF92 2.60 3.60 - non-profits 50% AMC00 46% AMC00 48% AM92 40% AF92 2.60 3.60 Pension Assurance non-profit 50% AMC00 46% AMC00 48% AM92 40% AF92 2.60 (2.31) 3.60 (3.55) Non-profit annual premium 50% AMC00 46% AMC00 48% AM92 40% AF92 2.60 (2.31) 3.60 (3.55) Non-profit single premium 50% AMC00 46% AMC00 48% AM92 40% AF92 2.60 (2.31) 3.60 (3.55) Annuities in Possession Immediate/deferred < 2,000 91% IML00 98% RFV00 95%IML00 102% RFV00 2.60 (2.31) 3.60 (3.55) Immediate/deferred < 4,000 81% IML00 87% RFV00 84%IML00 89% RFV00 2.60 (2.31) 3.60 (3.55) Immediate/deferred < 10,000 74% IML00 79% RFV00 78%IML00 84% RFV00 2.60 (2.31) 3.60 (3.55) Immediate/deferred > 10,000 68% IML00 73% RFV00 67%IML00 72% RFV00 2.60 (2.31) 3.60 (3.55) GPM As above As above As above As above 2.81 3.80 BA 106% RMV00 107% RFV00 109% RMV00 107% RFV00 2.65 3.60 Century 91% PCMA00 107% PCFA00 98% PCMA00 102% PCFA00 2.65 3.60 SMA 94% PCMA00 92% PCFA00 93% PCMA00 98% PCFA00 2.65 3.60 SPL 96% PCMA00 111% PCFA00 98% PCMA00 107% PCFA00 2.65 3.60 Pearl 111% RMV00 107% RFV00 107% RMV00 107% RFV00 2.65 3.60 NPI 100% RMV00 93% RFV00 93% RMV00 95% RFV00 2.65 3.60 Ping 2 Block 1 75% S1PMA 73% S1PFA N/A N/A 2.15 N/A Ping 2 Block 2 77% S1PMA 75% S1PFA N/A N/A 2.15 N/A Ping 2 Block 3 76% S1PMA 72% S1PFA N/A N/A 2.15 N/A CMI 2013 improvements with a long-term improvement rate of males 2% / females 1.5% apply to all annuities in possession. For Guardian annuities a 3 year selection period applies and mortality rates are reduced by 17.8% in this PB Life Assurances period. With profits 102% AMC00 102% AFC00 84% AM92 90% AF92 2.60 3.60 Non-profit 102% AMC00 102% AFC00 84% AM92 90% AF92 2.60 3.60 Term assurance smokers 88% TMC00 92% TFC00 144% TM92 66% TF92 2.60 3.20 Term assurance non-smokers 88% TMC00 92% TFC00 54% TM92 66% TF92 2.60 3.20 Term assurance other 88% TMC00 92% TFC00 54% TM92 66% TF92 2.60 3.20 Unit linked business Freedom non-smokers 140% TMN00 140% TFN00 140% TMN00 140% TFN00 0.70 0.80 Freedom smokers 120% TMS00 145% TFS00 120% TMS00 145% TFS00 0.70 0.80 GLLA 102% AMC00 105% AFC00 90% AM92 96% AF92 0.70 0.80 Choices non-smoker 85% A67/70 85% A67/70 85% A67/70 85% A67/70 0.60 1.00 Choices smoker 105% A67/70 105% A67/70 105% A67/70 105% A67/70 0.60 1.00 GPM 56% AMC00 52% AFC00 44% AM92 44% AF92 0.60 1.00 PHI Business PHI Fund UK See 4(5) below. 1.00 2.25 PHI Fund Overseas 0.00 0.70 PHI Fund Claims in Payment 2.00 2.75 GPM Claims in Payment 1.90 2.65 174

(3) The yield on non-gilt fixed interest securities (bonds) is calculated by reference to market prices. This yield is reduced by the sum of 1.5 times a default allowance based on bond rating and term, derived from historic credit default data, and 20% of the net bond spread (reduced by 1.5 times the same default allowance) over the swap yield of an equivalent duration. The equity yield is calculated by reference to the FTSE 350 yield and reduced by a risk margin of 0.40%. (4) See table in 4 (2) above. Expectations of life are as follows: Product 2014 2013 Guardian - Annuities In Payment Males Females Males Females Age 65 <= 2000 22.9 24.9 22.8 24.9 <= 4000 23.9 25.9 23.9 26.0 <= 10000 24.7 26.7 24.4 26.5 > 10000 25.5 27.4 25.9 27.9 Age 75 <= 2000 13.7 15.6 13.6 15.5 <= 4000 14.5 16.4 14.5 16.4 <= 10000 15.2 17.1 15.0 16.9 > 10000 15.8 17.7 16.2 18.1 Guardian Deferred Annuities Age 65 at 45 <= 2000 26.0 27.2 25.8 27.2 <= 4000 27.1 28.2 27.0 28.3 <= 10000 27.9 29.0 27.5 28.8 > 10000 28.7 29.7 29.0 30.2 Age 65 at 55 <= 2000 24.4 26.1 24.2 26.1 <= 4000 25.5 27.1 25.4 27.2 <= 10000 26.3 27.9 25.9 27.7 > 10000 27.1 28.6 27.4 29.0 Product 2014 2013 Phoenix - Annuities In Payment Males Females Males Females Age 65 BA 23.7 26.0 23.4 26.0 Century 25.4 25.0 24.7 25.4 SMA 25.1 26.3 25.1 25.8 SPL 24.9 24.7 24.7 25.0 Pearl 23.4 26.0 23.6 26.0 NPI 24.2 27.1 24.8 26.9 PWP 24.5 26.7 - - Alba 24.3 26.4 - - SAL 24.4 26.8 - - Age 75 BA 14.6 16.3 14.3 16.3 Century 15.8 15.6 15.2 15.9 SMA 15.6 16.7 15.6 16.2 SPL 15.4 15.3 15.2 15.6 Pearl 14.3 16.3 14.5 16.4 NPI 15.0 17.3 15.6 17.1 PWP 15.2 17.2 - - Alba 15.0 16.9 - - SAL 15.1 17.3 - - 175

(5) The Inception rates for Income Protection are a percentage of CMIR12 table dependent on the deferred period as follows: Deferred Period 4 weeks 13 weeks 26 weeks 52 weeks 2014 135% 135% 135% 135% 2013 85% 95% 145% 295% For Income protection claims in payment the termination rates are a modified CMIR12 table and modified AMC00/AFC00 combined. From 2014 rates are no longer differentiated by Deferred period, Group / Individual business or Duration Inforce. The assumptions covering all occupation classes, are as follows: Modified CMIR12 & Modified AMC00/AFC00 combined Termination Rates (Ultimate) Age Males Females 25 0.085836 0.085619 35 0.074522 0.074362 45 0.063033 0.062899 55 0.053806 0.053350 The assumptions used in 2013 are set out below: For Group Income Protection claims in payment the termination rates are a modified CMIR12 table and modified AM92/AF92 combined. The assumptions used for a deferred period of twenty six weeks and covering all occupation classes, are as follows: Age Modified CMIR12 & AM92/AF92 combined Termination Rates Long Term Permanent Claims Duration 2 yrs female Duration 2 yrs male Duration 5 yrs female Duration 5 yrs male 25 0.0344 0.0347 0.0417 0.0420 35 0.0294 0.0296 0.0362 0.0364 45 0.0246 0.0249 0.0316 0.0319 55 0.0208 0.0222 0.0287 0.0301 Modified CMIR12 &AM92/AF92 combined Termination Rates Non-Long Term Permanent Claims Age Duration 2 yrs female Duration 2 yrs male Duration 5 yrs female Duration 5 yrs male 25 0.2823 0.2826 0.0599 0.0602 35 0.2325 0.2327 0.0516 0.0518 45 0.1810 0.1813 0.0444 0.0446 55 0.1291 0.1304 0.0391 0.0405 For Individual Income Protection claims in payment the termination rates are a modified CMIR12 table and modified AM80/AF80-1 table combined. The assumptions used for a deferred period of twenty six weeks and covering all occupation classes, are as follows: Age Modified CMIR12 & AM80/AF80-1 combined Termination Rates Duration 2 yrs female Duration 2 yrs male Duration 5 yrs female Duration 5 yrs male 25 0.1123 0.1126 0.0447 0.0451 35 0.0923 0.0924 0.0380 0.0382 45 0.0720 0.0725 0.0323 0.0329 55 0.0524 0.0550 0.0287 0.0313 176

(6) & (7) For the With Profits Fund the investment expenses assumed for assets hypothecated to liabilities were 0.113% of fixed interest assets and 0.044% of equities. The Zillmer adjustments used for the 2014 and 2013 valuations were as follows: Category of Policy (& Product Code) Zillmer expressed as a percentage of Sum Assured or Valuation Cash Option Life Assurance business % With Profits Whole Life & Endowment (100, 120, 125) 2.25 Stand-Alone Critical Illness (355) Accelerated Critical Illness (345) Level & Decreasing Term Assurances (325, 330) 0.75 Group Life (410) 0.40 General Annuity and Pension business With Profits Whole Life & Endowment (100, 120, 155) 2.00 With Profits Deferred Annuities (165, 175) 2.00 Level & Decreasing Term Assurances (325, 330) 1.00 0.50 0.50 For the Non-Profit Fund the investment expenses assumed were 0.113% of the value of assets hypothecated to Guardian business liabilities and 0.185% of the value of assets backing Phoenix annuity business. The gross renewal expenses assumed in the gross premium valuation were as follows: Category of Policy (& Product Code) 2014 2013 Deferred Annuity (390) 38.94 37.66 Annuity (400) 11.79 11.52 The expense assumptions for non-unit liability calculations for linked business were as follows: Category of Policy (& Product Code) Per policy gross expense Inflation rate of expenses & monthly service charges Unit growth rate before annual management charge 2014 2013 2014 2013 2014 2013 UL Bond (700) 38.99 37.71 4.25% 4.75% 3.75% 4.75% UL Regular Premium Whole Life (710) UL Target Cash Endowment (720) UL Regular & Single Premium Pension (725) 48.18 46.60 4.25% 4.75% 3.75% 4.75% 46.48 44.95 4.25% 4.75% 3.75% 4.75% 32.52 31.45 4.25% 4.75% 4.00% 5.00% Unit-linked and unitised with profits investment expense assumptions were 0.22% of the fund. For unitised with profits policies the same per policy expense and inflation assumptions as above apply, but the bonus rates presented in (8) below replace the unit growth rates above. The assumed rate of tax relief for BLAGAB expenses was 20%. (8) For accumulating with profits classes of business the following future bonus rates were assumed: Category of Policy Bonus rate after deduction of annual management charge or expense allowance Year 1 Year 2 Year 3+ Freedom UWP 1.25% 1.25% 1.25% Choices UWP 1.50% 1.50% 1.50% Deposit Administration Expiry of bonus rate for 15 years from purchase, then 15-year Gilt yield less expenses Pension Saver 4.50% 1.75% 0.75% For conventional with profits business a net premium valuation was used. 177

(9) Nil lapses are assumed for all business lines other than those shown in the table below. Product Event Average lapse/surrender rate for the policy years (%) 1-5 6-10 11-15 16-20 Level Term Lapse 5.2 5.2 5.2 5.2 Decreasing Term Lapse 5.2 5.2 5.2 5.2 Accelerated Critical Illness Lapse 5.2 5.2 5.2 5.2 UL Savings Endowment Surrender 5.7 5.7 5.7 5.7 UL Target Cash Endowment Surrender 5.2 5.2 5.2 5.2 UL Bond Surrender 3.6 3.6 3.6 3.6 UL Bond Auto-Withdrawals 100% of current withdrawals UWP Individual Pension Paid-Up 0.0 0.0 0.0 0.0 UWP Individual Pension Surrender 2.4 2.4 2.4 2.4 UL Individual Pension Paid-Up 0.0 0.0 0.0 0.0 UL Individual Pension Surrender 2.4 2.4 2.4 2.4 (10) For unit-linked business any negative values were eliminated as they arose. For non-linked deferred annuities with a guaranteed cash option rate an annuity take up assumption of 85% is assumed, increasing by 1% for each year of projection to a maximum of 95%. There are no other material basis assumptions. (11) (i) Interest rate swaps (ii) The funds hold a number of interest rate swaps to swap a series of fixed interest rates for a series of floating interest rates on nominal amounts in the future. The exposures at 31 December 2014 are 5,288,265,000 nominal where the funds are paying a fixed rate to the counterparty ( 537,712,000 With Profits Fund and 4,750,553,000 Non-Profit Fund) and 6,680,067,000 where the funds are receiving a fixed rate ( 144,464,000 With Profits Fund and 6,535,603,000 Non-Profit Fund). The net market value is 498,218,000. The income from the swaps is matched against the future guaranteed liabilities of the fund. The counterparties are Barclays, RBS, Lloyds and Morgan Stanley. Cash settled payer swaptions The funds hold a series of swaptions to match the maturing profile of deferred annuities with guaranteed cash option rates. The swaptions hedge against interest rates rising to the extent that the guaranteed cash option rate becomes onerous. For example, a 15 year swaption with a strike of 8% would give Guardian Assurance the right to receive a cash payment at maturity if 15 year swap rates were above 8%. The counterparty to the swaption is UBS and the market value at 31 December 2014 is 765,000 in the Non-Profit Fund and 709,000 in the With Profits Fund. (iii) Equity put options A series of equity put options have been purchased by the With Profits Fund to hedge against the guaranteed maturity values on Homebuilder Plus policies. The options are matched against the portfolio of future maturing units on Homebuilder Plus policies and contain a basket of global equity markets based on the geographical distribution of the GLLA Managed Fund. For maturities in the next 3 years the options protect against market falls below 80% of the market level at the strike date. For later maturities the strike is at 110%. A series of equity put options have also been purchased by the With Profits Fund to provide protection for terminal bonus payments on conventional with profit endowment maturities over the next 5 years. The options are matched against terminal bonus payments on future maturing policies and contain a basket of FTSE 100 UK equity futures. For 2015 maturities the options protect against falls below 90% of the market level at the strike date. This strike percentage reduces each year to 74% for maturities in 2019. The market value of all equity put options at 31 December 2014 is 7,382,000. (iv) Equity futures (v) The Non-Profit Fund holds a number of options to trade FTSE 100 and other market indices, to hedge the shareholder s equity risk. The exposure is approximately 239m sell options and 28m buy options. The market value of the futures at 31 December 2014 is - 10,369,000. Credit default swaps The Non-Profit Fund has sold 605,000,000 of exposure to credit default swaps. instruments at 31 December 2014 is - 4,754,000. (vi) Currency swaps The market value of the The Non-Profit Fund holds a number of currency swaps to hedge currency risk. The exposure is 349,143,000 where the fund is exchanging US dollars for sterling and 184,340,000 where the fund is exchanging euros for sterling. The net market value is 7,405,000 and the counterparty is Merrill Lynch. (vii) Exchange traded derivatives The Non-Profit Fund holds a number of exchange traded derivatives to hedge currency yield risk. The exposure is 3,050,000 where the fund is exchanging sterling yields for US dollar yields and 28,285,000 where the fund is exchanging euro yields for sterling yields. The net market value is 548,000 and the counterparty is Chicago Mercantile Exchange. (12) Not applicable. 178

Options and Guarantees 5 (1) Guaranteed annuity options There are no reserves which exceed the lesser of 10m and 1% of total mathematical reserves. (2) Guaranteed unit-linked maturity values (i) GLLA Homebuilder Plus Homebuilder Plus policies pay at maturity the greater of the guaranteed sum assured and the bid value of the Managed units held. If the unit value exceeds the sum assured before maturity then the units are switched into the GLLA Deposit Fund. The liability is to a large extent hedged by a series of equity put options described in 4(11) above which match the cashflows from future maturities and the investment composition of the GLLA Managed Fund. The additional reserve for the guarantee is then calculated as the maximum loss that could arise after taking the put options into account, plus the current value of the relevant options. A reserve of 10,000,000 is held, which includes an amount corresponding to the market value of the options held of 186,000. Category of policy Homebuilder Plus Mathematical reserve Outstanding durations 30.2m Average 1 year Guarantee reserve Guaranteed amount MVA free conditions In-force premiums 10.0m 20.9m None 0.7m p.a. Increments accepted No (3) Guaranteed insurability options and claim values There are no reserves which exceed the lesser of 10m and 1% of total mathematical reserves. (4) Other options and guarantees No significant other options or guarantees exist. Expense Reserves 6 (1) An aggregate amount of 29,941,000 is contained in the valuation arising during the 12 months after the valuation date to meet expenses in fulfilling policies in force at the valuation date. 14,265,000 is from explicit allowances and 15,676,000 is from implicit allowances. Allowances for investment expenses and maintenance expenses are 18,108,000 and 11,833,000 respectively. (2) Implicit allowances for expenses arise within the net premium valuation method for non-linked policies. The implicit expense allowance was tested against the discounted value of future expenses allowing for inflation and, for classes of business where the implicit allowance was inadequate, an additional reserve was set up. Implicit allowances for investment expenses are made by reducing the available yields in the calculation of the valuation rates of interest. (3) Form 43 Lines 14 and 44 include 18,944,000 of investment expenses and 12,953,000 of maintenance expenses before reassurance. The figures in (1) above are net of reassurance. (4) The funds are only writing new business where they are legally obliged to in respect of increments and options under existing policies. Therefore no reserve is required. (5) The Non-Profit and With Profits Funds are closed to new business and therefore no additional reserve is required to cover the costs of closure. (6) Not applicable. Mismatching Reserves 7 (1) The sum of the mathematical reserves of the Company (other than liabilities for property linked benefits) analysed by reference to currency are as follows: Liabilities Assets UK 10,326,990,000 9,786,808,000 Euro 289,000 159,268,000 USD $ 381,203,000 10,327,279,000 10,327,279,000 (2) 95% of the liabilities in the above table are matched by assets in the same currency. (3) No reserve is required for currency mismatching as currency swaps are held to hedge the risk. (4) No resilience capital requirement is required under INSPRU 3.1.16R as the Company is a realistic basis firm. (5) Not applicable see 7(4). (6) Not applicable see 7(4). (7) No further reserve arises from the test on assets in INSPRU 1.1.34R(2). 179

Other Special Reserves 8 There are no special reserves which exceed the lesser of 10m and 1% of total mathematical reserves. Reinsurance 9 (1) No premiums were payable under facultative reinsurance arrangements in the reporting period to companies not permitted to carry on insurance business in the United Kingdom. (2) Reinsurance Treaties: see later table. Reversionary (or annual) bonus 10 For classes of business where the mathematical reserves exceed the lesser of 10m and 1% of the total mathematical reserves: Category of policy Mathematical Reserves Reversionary Bonus Rate for 2014 Reversionary Bonus Rate for 2013 Total Guaranteed Bonus Rate for 2014 Assurances 181.0m 1.00% 1.00% nil Pension Plus, VIP & Buy- Out Plan 855.9m 0.50% 0.50% nil Personal Pension 188.6m 1.00% 1.00% nil Freedom UWP 28.1m 1.25% 1.25% nil Choices UWP 342.1m 1.50% 1.50% nil Countrywide UWP reassurance accepted 9.8m 1.50% 1.50% nil Pension Saver 72.9m 4.50% 5.00% nil Group Funding 15.5m 2.60% 2.60% nil 180

Reinsurance Treaties where the Company is the Cedant (paragraph 9.2) Name of Reinsurer (d) Nature and extent of cover (e) Premiums payable in 2014 (f) New Business (h) Mathematical Reserves ceded (j) Retention by the Insurer (k) Scottish Equitable plc Immediate Annuities on Risk premium rates 100% of UK Individual and Group, level and fixed escalation, pension annuities commencing after 1 January 1999. Nil Closed to New Business 1,002,750,249 Nil RGA Global Reinsurance Co Ltd Longevity Swap in respect of 100% of selected Phoenix reinsured annuities. 3,298,400 392,884,616 Closed to New Business RGA International Reinsurance Co Ltd 173,600 20,678,138 Nil Notes to the above table: (g) No deposit back arrangements exist. (i) There are no undischarged obligations of the insurer. (l) RGA Global is not authorised to carry on insurance business in the United Kingdom. All the other reinsurers are authorised to carry on insurance business in the United Kingdom. (n) There are no material contingencies under the treaties. (o) There are no liabilities to refund commission in the event of lapse or surrender under the treaties, other than where premiums are refunded to the Company. (p) Not applicable. 181

APPENDIX 9.4a (rule 9.31(b)) ABSTRACT OF VALUATION REPORT FOR REALISTIC VALUATION Introduction 1 (1) The valuation date is 31 December 2014. Assets (2) The previous valuation date was 31 December 2013. (3) No interim valuations (for the purposes of Rule 9.4a of IPRU(INS)) have been carried out since the previous valuation. 2 (1) The economic assumptions used to value the profits and losses on non-profit policies are as follows: Date of valuation 31 Dec 2014 31 Dec 2013 Discount rate Zero coupon swap curve + 80% of (average yield differential for corporate bonds 1.5 times a default allowance based on historic data) Zero coupon swap curve + 80% of (average yield differential for corporate bonds 1.5 times a default allowance based on historic data) Gross interest on reserves Zero coupon swap curve + 80% of (average yield differential for corporate bonds 1.5 times a default allowance based on historic data) Zero coupon swap curve + 80% of (average yield differential for corporate bonds 1.5 times a default allowance based on historic data) Expense inflation 4.00% 4.50% The zero coupon swap yields as at 31 December 2014 are as follows: Term 1 2 3 4 5 6 7 8 9 10 11 12 Yield % 0.74 0.94 1.15 1.32 1.46 1.57 1.67 1.75 1.81 1.87 1.94 1.99 Term 13 14 15 16 17 18 19 20 21 22 23 24 Yield % 2.04 2.08 2.12 2.15 2.18 2.20 2.23 2.25 2.26 2.27 2.28 2.28 Term 25 26 27 28 29 30 31 32 33 34 35 36+ Yield % 2.28 2.29 2.29 2.29 2.29 2.29 2.29 2.28 2.28 2.28 2.27 2.27 The addition made to the yields above to determine the discount rate is 0.69%, representing 80% of the average yield differential for the bonds backing non-profit liabilities after deducting the default allowance, less investment expenses of 0.113% throughout. The future profits on non-profit business are 41m, arising from non-profit non-linked life and pensions business. (2) No information is required by this paragraph. (3) No information is required by this paragraph. (4) No information is required by this paragraph. 182

With profits benefits reserve liabilities 3 (1) The with profits benefit reserves are as follows: Class Pension Plus / VIP / Buy-Out Plan Personal Pension DPA/Pension Saver / Group Funding Asset Discounted With profits Future policy Valuation Share cash flow benefit reserve related liabilities method 49m 80m 82m 3m See note (i) 153m 165m 169m 25m See note (i) 98m 98m Nil See note (i) Life Assurance 370m 182m 302m 137m See note (i) Freedom UWP 53m 28m 47m 16m See note (ii) Choices & Countrywide UWP 1,032m 347m 859m 444m See note (ii) Total 1,557m 625m (i) These policies are valued as the greater of a retrospective valuation and a prospective valuation. The retrospective valuation is an accumulation of premiums less expenses at past rates of investment return. The prospective valuation is the future guaranteed benefits discounted at zero coupon swap yields plus 0.58%, representing 80% of the average yield differential for the bonds backing with profits liabilities after deducting the default allowance, and less 0.113% investment expenses. The prospective valuation assumes future annual bonuses continue at their current rate without any allowance for terminal bonus. Future lapses and mortality assumptions are consistent with those used for the published embedded value. (ii) UWP policies are valued as the greater of a retrospective valuation and a prospective valuation. The retrospective valuation is an accumulation of premiums at past rates of investment return. The prospective valuation is the future guaranteed benefits discounted at zero coupon swap yields plus 0.58% as in (i) above and less 0.113% investment expenses. The prospective valuation assumes future annual bonuses continue at their current rate without any allowance for terminal bonus. No allowance is made for future lapses or mortality. (2) The amounts in the table in (1) above correspond to the amounts shown in lines 31 and 49 of Form 19. (3) No information is required by this paragraph. (4) No information is required by this paragraph. 183

With profits benefits reserve retrospective method 4 (1) The retrospective methods used to value with profits policies are as follows: Class WP Deferred Annuities (Pension Plus / VIP / Buy-Out Plan / Personal Pension / Pension Saver / DPA / Group Funding ) Life Assurance Unitised With Profits (Freedom, Choices and Countrywide) Retrospective valuation method Premiums less expenses, commission, tax and shareholders transfers are accumulated at past rates of investment return, plus an allowance for bonus surplus (which, from 1999, includes an allowance for the distribution of the free estate). From 2004 the asset mix assumes that future guaranteed benefits are matched by fixed interest assets. The calculation is performed for each individual policy, but where there is insufficient data (e.g. for paid-up policies) the asset share is taken as the statutory reserve multiplied by the ratio of the asset share to the statutory reserve for policies where an asset share has been calculated. We cannot calculate retrospective asset shares for approximately 30% of the business (as measured by reserves) because we do not have full premium histories, typically because policies have been altered or made paid-up. However, detailed information is available on a policy by policy basis in other respects, such as benefits secured, date of birth, normal retirement date, etc. The information available is sufficient for a prospective valuation of the liability. The with profits benefit reserve for this class of business is primarily based on the prospective calculation. Calculated as for Pension Plus / VIP above. The proportion of reserves that have been estimated by ratioing is approximately 30%, because asset shares are not calculated for whole of life and paid-up policies. Paid-up policies make up less than 1% of the benefit reserves. Reserves have been calculated by accumulating past premiums paid. The rates of investment return are based on shadow fund growth up to 2003, and actual investment returns after 2003. The shadow fund is constructed from historic equity, bond and property unit prices as a proxy for with profits investment returns, adjusted for bonus surplus. The calculations are performed at individual policy level and past premiums are split by year of payment and year of maturity. Approximately 10% of the reserves are based on estimated unit data. (2) There have been no significant changes to the valuation methods for with profits policies. (3) (a) The date of the last expense investigation was 31 December 2014. (b) Expense investigations are performed annually. (c) Renewal expenses allocated to with profits business are based on an expense agreement with the servicing company, under which unit costs are fixed for each policy and increase each year at RPI+1%. Prior to 1999 no such expense agreement existed. Estimated past renewal expenses are allocated to each asset share. Current initial expense assumptions are not required as the fund is closed to new business. Current maintenance expenses for business written within the With Profits Fund are as follows: Class 2014 Renewal Expense Unit Cost 2014 Assumed Renewal Expenses Pension Plus / VIP 121.74 105,000 Buy-Out Plan 46.76 Included above Life Assurance 42.22 740,000 Personal Pension 47.66 358,000 Group Scheme for Borrowers 9,803 per scheme Included in term assurance Term Assurance 25.82 640,000 Group Funding 3,648 per scheme 65,000 Deposit Administration 2,317 per scheme 11,000 Pension Saver 3,259 per scheme 376,000 Annuities 42.93 10,000 Other 290,000 Total 2,599,000 Sample past initial expense assumptions required for with profits benefit reserve calculations are as follows: Class 1979 1984 1989 1994 Buy-Out Plan 150.00 274.50 380.00 240.00 Life Assurance 100.00 183.00 261.30 325.60 Personal Pension 150.00 274.50 380.00 240.00 The fund was closed to new business except by increment in 1999. 184

(4) No charges for guarantees or use of capital were deducted from the with profits benefit reserve during 2013 or 2014. (5) The charges deducted from the With Profits Fund for non-insurance risk are: Investment charges of 0.085% for fixed interest, 0.033% for equity, 0.05% for cash and 0.011% for fund accounting (before VAT, where appropriate). Tax on transfers to the shareholder. (6) The ratio of the claims paid over each of the last three years to the sum of the with profits benefit reserve plus past miscellaneous surplus is as follows: Average Ratio of Claims to With Profits Benefit Reserves 2014 2013 2012 Life WP 100% 99% 98% Freedom UWP 98% 99% 98% Choices UWP 98% 99% 99% Pension Plus / VIP / Buy-Out Plan 100% 100% 100% Personal Pension 100% 103% 103% DPA / Pension Saver / Group Funding 100% 100% 100% (7) The With Profits Fund investment return for the 12 months to 31 December 2014 was 7.1%. This includes assets in the fund which back with profits business only and reflects the increase in value of the bonds and equities over the 12 month period. The return credited to each class of with profits business will differ according to the equity backing ratio of each class. The fund s equities returned 0.9% during the 12 months to 31 December 2014 and the bonds excluding swaps returned 12.2%. The gross investment return for each with profits class for the 12 months to 31 December 2014 is as follows: Class Investment Return Pension Plus / VIP / Buy-Out Plan 11.8% Life Assurance 6.6% Personal Pension 10.9% Unitised With Profits Pensions 5.2% Unitised With Profits Life 6.7% Pension Saver / DPA / Group Funding 12.2% 185

With profits benefits reserve prospective method 5 (1) The key assumptions used in the prospective valuation of the with profits benefit reserve are as follows: Class Pension Plus / VIP Buy-Out Plan Life WP Personal Pension UWP Pension Saver DPA Group Funding Risk Discount Rate (a) Zero coupon swap yield plus 0.58% less 0.113% investment expenses Zero coupon swap yield plus 0.58% less 0.113% investment expenses Zero coupon swap yield plus 0.58% less 0.113% investment expenses Zero coupon swap yield plus 0.58% less 0.113% investment expenses Zero coupon swap yield plus 0.58% less 0.113% investment expenses Zero coupon swap yield plus 0.58% less 0.113% investment expenses Zero coupon swap yield plus 0.58% less 0.113% investment expenses Zero coupon swap yield plus 0.58% less 0.113% investment expenses Expense Inflation Rate (c) Annual Bonus Rate (d) Renewal Expenses per policy (e) Lapse Rates (f) 4.00% 0.5% 125.87 1.5% 4.00% 0.5% 48.35 1.5% 4.00% 1.0% 43.66 2.3% 4.00% 1.0% 49.27 1.9% 4.00% Pens 1.5% Life 1.25% 4.00% 4.5% 4.00% 4.5% 4.00% 2.6% N/A 0% 3369.76 per scheme 10% 2395.61 per scheme 10% 3877.50 per scheme 10% Mortality Table 63%/58% AM00/AF00 & 96.1% IML00 / 103.3% RFV00 63%/58% AM00/AF00 & 96.1% IML00 / 103.3% RFV00 85%/85% AM00/AF00 39%/34% AM00/AF00 & 96.1% IML00 / 103.3% RFV00 N/A 63%/58% AM00/AF00 & 96.1% IML00 / 103.3% RFV00 63%/58% AM00/AF00 & 96.1% IML00 / 103.3% RFV00 63%/58% AM00/AF00 & 96.1% IML00 / 103.3% RFV00 Gtd Annuity Takeup 75% 80% N/A 75% N/A N/A N/A 75% (i) No final bonuses were assumed (note d). (ii) No assumptions regarding investment returns were required as the prospective valuation was applied to future guaranteed benefits only (note b). (iii) No other expense charges were made, other than the deduction of the annual management charge (1% gross) for unitised with profits business (note e). (iv) The annuitant mortality projection tables used are IML00 and RFV00 with CMI 2013 improvements with a 1.5% males / 1.0% females long-term annual improvement rate. The base assumption above applies to annuities below 2,000 p.a. For larger annuities the base assumption of 96.1%/103.3% is reduced to 85.1%/91.5% ( 2,000 p.a. but below 4,000 p.a.), 77.6%/83.5% ( 4,000 p.a. but below 10,000 p.a.) or 71.5%/76.9% (above 10,000 p.a.). A 3 year select period applies and mortality rates are reduced by 17.8% in this period. (2) No information is required by this paragraph. 186

Cost of guarantees, options and smoothing 6 A close matching investment philosophy has been adopted for the fund to such an extent that the fixed interest portfolio is effectively a replicating portfolio for the guarantees and options within the With Profits Fund. In order to demonstrate that the fixed interest portfolio is an appropriate and sufficiently robust replicating portfolio deterministic stress tests have been applied to both the realistic assets and liabilities. The stress tests applied were: (1) Equities falling 44% and interest rates rising 1.00%. (2) Equities falling 44% and interest rates falling 1.00%. These stress tests have been identified using stochastic techniques and are consistent with 99.5 th percentile outcomes over a one year horizon and therefore have an associated probability of 1 in 200 of occurring within 12 months. As the component stresses within each scenario correspond to a 1 in 200 event, each scenario should correspond to an event which is more remote than 1 in 200. The interest rate stresses have been chosen based on the approximate mean duration of the liabilities. The stresses were chosen to be weighted towards adverse scenarios to reflect market pricing for risk. Base Position Realistic Value of Liabilities before addition of Estate Realistic Value of Matching Assets Stress Test 1 Realistic Value of Liabilities before addition of Estate Realistic Value of Matching Assets Stress Test 2 Realistic Value of Liabilities before addition of Estate Realistic Value of Matching Assets 1,963m 1,963m 1,498m 1,498m 1,653m 1,653m The above demonstrates that even in these relatively extreme scenarios the cost of the guarantees is nil. In assessing the liabilities under each scenario the projection term extended to the term of the last policy. Financing costs 7 There are no financing arrangements in place. Other long-term insurance liabilities 8 An amount of 24,320,358 is included in line 47 of Form 19. This amount is in respect of tax payable on future transfers to shareholders, which, consistent with the Principles & Practices of Financial Management, are charged to the Estate rather than the with profits asset shares. Realistic current liabilities 9 The current liabilities shown in line 51 of Form 19 are the regulatory current liabilities. These are made up of amounts due to other group companies, outstanding claims, amounts held in suspense accounts and sundry creditors. Risk capital margin 10 (a) Guidance requires the Company to recognise the Estate as a realistic liability within the With Profits Fund, which gives rise to a risk capital margin of nil. This change in presentation has not impacted the management of the fund. If the Estate were not treated as a liability, as in the 2004 realistic balance sheet, then the risk capital margin would be 86m, and the balance sheet would be as follows: base position most adverse scenario Realistic value of assets 2,278m 2,023m Realistic value of liabilities 1,963m 1,829m Working capital 315m 194m Required matching assets 2,049m 1,829m Risk capital margin 86m ( 2,049m less 1,963m) Realistic excess capital 229m 187

The most adverse scenario was the following: (i) Equities fall by 20% and property falls by 12.5% (the fund no longer holds any owner-occupied property). This is more onerous than a rise in equities. (ii) Bond yields fall by 0.38%, which is 17.5% of the 15-year Gilt yield. This is more onerous than a rise in bond yields. (iii) Credit risk margins widen on corporate bonds. The average change in spread resulting from the credit stress test for the corporate bonds backing the with profits benefit reserves is 0.97%, and the average reduction in value is 7.4%. (iv) Persistency rates fall by 32.5% and take up rates on deferred annuities are increased to 87% for Buy-Out Plans, 83% for Pension Plus/VIP and 83% for Personal Pension. The with profits realistic liabilities increase by 2.0%. (v) The changes in asset value in (iii) are independent of the changes in liability value in (iv). (b) No particular management actions have been assumed in calculating the risk capital margin. In particular, no changes in asset allocation or surrender value bases have been assumed. However, it is implicitly assumed that if a bond defaults it would be replaced by a bond of equivalent duration. (c) (i) The risk capital margin is zero. If the estate were not treated as a realistic liability then the risk capital margin would be 86m and the working capital would be 315m. The assets available to cover this risk capital margin before the addition of the Estate as a realistic liability and their value in the realistic balance sheet are as follows: Type of asset Value Cash - Fixed interest securities 86m Total 86m (ii) The above assets are within the With Profits Fund. Tax 11 Full provision for taxation on past income and gains is made in the retrospective with profits benefit reserve valuation, including the tax that would be due if all of the assets were sold at their current market value. Derivatives 12 (i) Interest rate swaps The fund holds a number of interest rate swaps to swap a series of fixed interest rates for a series of floating interest rates on nominal amounts in the future. The exposures at 31 December 2014 are 537,712,000 nominal where the fund is paying a fixed rate to the counterparty and 144,464,000 where the fund is receiving a fixed rate. The net market value of the swaps is 2,233,000. The income from the swaps is matched against the future guaranteed liabilities of the fund. The counterparties are Lloyds, Morgan Stanley, Barclays, UBS and RBS. (ii) Cash settled payer swaptions The fund holds a series of swaptions to match the maturing profile of deferred annuities with guaranteed cash option rates. The swaptions hedge against interest rates rising to the extent that the guaranteed cash option rate becomes onerous. For example, a 15 year swaption with a strike of 8% would give Guardian Assurance the right to receive a cash payment at maturity if 15 year swap rates were above 8%. The counterparty to the swaption is UBS and the market value at 31 December 2014 is 709,000. (iii) Equity Put Options A series of equity put options have been purchased by the With Profits Fund to hedge against the guaranteed maturity values on Homebuilder Plus policies. The options are matched against the portfolio of future maturing units on Homebuilder Plus policies and contain a basket of global equity markets based on the geographical distribution of the GLLA Managed Fund. For maturities in the next 3 years the options protect against market falls below 80% of the market level at the strike date. For later maturities the strike is at 110%. A series of equity put options have also been purchased by the With Profits Fund to provide protection for terminal bonus payments on conventional with profit endowment maturities over the next 5 years. The options are matched against terminal bonus payments on future maturing policies. For 2015 maturities the options protect against falls below 90% of the market level at the strike date. This strike percentage reduces each year to 74% for maturities in 2019. The market value of all equity put options at 31 December 2014 is 7,382,000. 188

Analysis of change in working capital 13 An analysis of the movement in working capital since the previous valuation is as follows: Optional disclosure Working capital at 31 December 2013 before estate distribution 351m Restatement of 2013 Working Capital on 2014 demographic basis 14m Equity movements impact on Working Capital 1m Interest Rate movements impact on Working Capital 1m Spread movements impact on Working Capital 2m Change in provisions ( 33m) Unwind of interest margin on assets 2m Allocation of free estate to asset shares ( 45m) Unexplained 16m Change in shareholders share of future estate distribution 6m Future estate distribution ( 315m) Working capital at 31 December 2014 0m 14 No information is required by this paragraph. 189

Returns under the Accounts and Statements Rules Information on the Actuary who has been appointed to perform the with-profits actuary function required by rule 9.36 of the Interim Prudential Sourcebook for Insurers. 1. (a) The Actuary who has been appointed to perform the with-profits actuary function, G. A. Pennington, participated in a bonus scheme during the year operated by Guardian Companies Services Ltd, a fellow subsidiary of Guardian Financial Services Holdings UK Ltd. (b) (c) (d) (e) (f) The Actuary has the following Insurance Policies with the insurer: (i) A with-profit endowment maturing in November 2021 with a guaranteed sum assured of 20,348 (ii) A with-profit deferred annuity maturing in April 2029 with a guaranteed annuity of 9,670 The aggregate amount of remuneration and other benefits (before tax) received by the With Profits Actuary from Guardian Companies Services Ltd for the period to 31 December 2014 was 362,800 under a contract of service with that company. Guardian Companies Services Ltd is a wholly owned subsidiary of Guardian Financial Services Holdings UK Ltd, the immediate parent company of. Pension, health insurance, critical illness, income protection and lump sum life assurance benefits are provided under the standard terms and conditions of the insurer's employment contract. The Actuary has 13,245 ordinary shares in Guardian Holdings Europe Ltd, a wholly owned subsidiary of the Cinven Funds, the ultimate parent undertaking. The Actuary has 16,048 loan notes in Guardian Mid-Co Ltd, a wholly owned subsidiary of the Cinven Funds, the ultimate parent undertaking. 2. The insurer made a request to him to furnish it with the particulars specified in paragraph (1) of rule 9.36. Pursuant to that request, he supplied the information in item 1 above and the insurer has nothing to add to it. 190