Despite continued market volatility in 2010, the asset portfolio backing the annuity business remains of high quality and experienced no credit defaults. Although in 2010 the corporate default provisions were reduced due to some portfolio de-risking the impact was at least partially offset by new business written in the year plus market movements.

As a consequence, the total credit default provision remains unchanged from year end 2009 at £1.5bn. This represents 64 bps (2009: 68 bps) over the lifetime of the credit held per annum.