1.

The expected return on in-force is based on the unwind of the risk discount rate on the opening, adjusted base value of in-force ([VIF]). The opening base VIF of the Risk and Savings business was £3,679m in 2010. This is adjusted for effects of opening model changes of £39m to give an adjusted opening base VIF of £3,718m. This is then multiplied by the opening risk discount rate of 8.0% and the result grossed up at the notional attributed tax rate of 27% to give a return of £407m.

2.

The 2010 Group capital and financing contribution from shareholder net worth (SNW) comprises £146m from the average return of 5.9% on the average balance of invested assets of £2.5bn; offset by pre-tax corporate expenses charged to shareholders’ funds of £(8)m.

3.

Savings investments non-covered business mainly comprises Savings investments on an [IFRS] basis, adjusted for Suffolk Life, International (Ireland) and business conducted in Germany.

4.

Investment management operating profit excludes £27m (2009: £28m) of profits arising from the provision of investment management services at market referenced rates to the covered business. These are reported on a look through basis and as a consequence are included in the Risk, Savings and Group capital and financing covered business on an [EEV] basis.

5.

Investment projects comprises [Solvency II] and other strategic investments.

6.

International non-covered business includes our joint venture operations in Egypt, the Gulf, India and business unit costs of £5m (2009: £4m) allocated to the International segment.

1.

The expected return on in-force is based on the unwind of the risk discount rate on the opening, adjusted base value of in-force ([VIF]). The opening base VIF of the Risk and Savings business was £4,268m in 2009. This is adjusted for the effects of opening model changes of £31m to give an adjusted opening base VIF of £4,299m. This is then multiplied by the opening risk discount rate of 8.3% and the result grossed up at the notional attributed tax rate of 28% to give a return of £496m.

2.

The 2009 Group capital and financing contribution from shareholder net worth (SNW) of £125m comprises the average return of 7% on the average balance of invested assets of £2.1bn (£138m); offset by an adjustment for opening tax and other modelling changes of £(2)m and pre-tax corporate expenses charged to shareholders’ funds of £(11)m.

3.

Savings investments non-covered business comprises Savings investments on an IFRS basis, and adjustments for Suffolk Life and other Savings operations.

4.

2009 Investment management operating profit excludes £28m of profits arising from the provision of investment management services at market referenced rates to the covered business. These are reported on a look through basis and as a consequence are included in the Risk, Savings and Group capital and financing covered business on an EEV basis.

5.

International non-covered business includes our joint venture operations in Egypt, the Gulf, India and business unit costs of £4m allocated to the International segment.

6.

In 2009, in addition to current year investment return, £469m was released from the Shareholder Retained Capital and declared as surplus for tax purposes. As a result of the 2007 corporate restructure, this release along with current year movements did not give rise to any incremental tax and therefore resulted in a £59m benefit to embedded value.