1.

The £103m Risk and Savings covered business variation from longer term investment return reflects the strong recovery in equity and property markets resulting in a £85m investment variance from the Savings business on assets backing with-profit policies together with higher expected management charges on unit linked policies. A further £73m investment variance is due to the impact on projected tax within the embedded value from both prior year tax adjustments and market recoveries during 2010. Increased cost of capital arising from the reduction in the equity ratio for assets backing solvency capital has resulted in a £(71)m negative variance. Additionally, favourable market conditions during 2010 have allowed the annuity business to reduce some of its credit exposure to corporates and overall trading impact has resulted in a £18m positive variation.

2.

International covered business variation from longer term investment return primarily reflects the impact of the US capital restructure.

3.

Group capital and financing primarily relates to negative debt related investment variance. (See Note 2 (vii) of the Group’s consolidated financial statements.)