Performance in 2009.

We continue to improve quality and service in our individual protection business, ensuring that customer fairness is at the centre of our business model. The number of critical illness claims declined due to non-disclosure has reduced to just 1.8% from 4% in 2008. This is due to improvements in our underwriting processes which increase disclosure at the point of sale rather than at the point of claim. Steps have also been taken to make joint life policies fairer. Single life policies will now be offered to people who would previously have had their joint life policy cancelled as a result of non-disclosure from their partner.

The improved technology of our online service helps advisers to sell protection as they can quote, apply and complete applications online resulting in reduced approval time for clients. The benefits of this system have now been rolled out to Yorkshire Building Society, allowing them to solve a wider range of protection needs than was previously possible. Our expertise in tele-underwriting has allowed us to speed up the application process and immediate decisions can be made for 85% of applications which go through this process.

The addition of three new life insurance plans for the over 50s further expands and diversifies our product offering. These products are only available on a direct basis, limiting distribution costs.

Continued improvements were rewarded with four awards at the Financial Adviser Life & Pensions Awards. These were Best Life Assurance Provider, Best Term Assurance Provider, Best Critical Illness and Income Replacement Provider and Best Protection Provider.

There has been further consolidation of the group protection market in 2009 which has offered us opportunities due to our size and scale. Group protection continues to support UK companies by providing and protecting employee benefits and lobbying relevant bodies to ensure that any proposed legislation has no negative impact on provision.

Group protection written premiums were maintained at over £291m despite high levels of re-quoting in 2009 as companies looked for cost reduction opportunities. We continue to explore new opportunities to expand the scope of the customer base for these products and have had some success with entry to the public sector arena, reducing our reliance on the traditional market.

Centres of excellence in musculoskeletal, cardiovascular, oncological, neurological and psychological conditions contribute to improving return to work rates. Improved results, service standards and increased levels of professional qualifications by our employees were rewarded with the attainment of both Best Group Life Provider at the Cover Excellence Awards 2009 and Rehabilitation Initiative of The Year Award at The Rehabilitation First Awards 2009.

In our annuities business, we maintain a defined appetite for longevity risk. The strategic focus of generating cash from the business means that we are not prepared to bid for business that will not deliver an appropriate return on capital. Our flexible approach to writing business means that although we continue to hold the capital and capability to write further annuity business, our appetite can be limited if prices are not attractive.