Protection market overview Protect Association Maxine Udall and Ron Wheatcroft, 20 May 2016

Maxine Udall and Ron Wheatcroft | 20 May 2016 Term assurance -1.8% – Term only+ 2.4% – Term with CI - 9.7% Critical illness - 7.6% – Accelerated CI - 9.8% – Stand-alone CI % Income protection % Whole life + 7.3% – Guaranteed acceptance + 7.4% – Non-linked+ 8.2% – Unit-linked- 46.1% Term & Health Watch 2015 in summary VolumePremium Term assurance -1.7% – Term only-0.3% – Term with CI -3.4% Critical illness -2.4% – Accelerated CI -4.1% – Stand-alone CI +43.7% Income protection +14.4% Whole life +12.4% – Guaranteed acceptance +13.3% – Non-linked+10.9% – Unit-linked+2.3% 2

Maxine Udall and Ron Wheatcroft | 20 May 2016 Distribution split *Directly-authorised refers to any business of that nature, including IFAs. It isn't pure IFA business. 3 Distribution by product line, % market share 2015*TiedDirectly -authorisedDirectBancassurance Term assurance Critical illness (CI) Income protection (IP) Distribution by product line, % changes 2015/2014TiedDirectly-authorisedDirectBancassurance Term assurance Critical illness (CI) Income protection (IP)

Maxine Udall and Ron Wheatcroft | 20 May 2016 Total new term sales split between term and term with CI, by volume 4 New term sales with a CI benefit represent 32.1% of total new term sales in 2015 (34.9% in 2014).

Maxine Udall and Ron Wheatcroft | 20 May 2016 Product type % change 2015/2014 LTA without CI 508, , , Relevant life - 16,372 21, LTA with CI 201, , , DTA without CI 234, , , DTA with CI 220, , , FIB without CI 29,417 25,748 24, FIB with CI 1,022 2,770 2, Other term without CI 20,836 29,165 24, Other term with CI ,366.7 Total 1,216,649 1,279,448 1,255, Total new individual term sales split by LTA, DTA, family income benefit and other term sales, by volume 5

Maxine Udall and Ron Wheatcroft | 20 May 2016 Distribution channel % Change 2015/2014 Directly-authorised 878, , , , , Tied 593, , , , , Direct 16,619 50,220 45,563 36, , Bancassurance - 238, , , Total 1,488,106 1,473,404 1,216,649 1,279,448 1,255, Total new individual term sales by distribution channel, by volume 6

Maxine Udall and Ron Wheatcroft | 20 May 2016 Product type % Change 2015/2014 Term with CI423,020446,513403, Whole life with CI Stand-alone CI22,00618,20826, Total445,679465,439430, New individual stand-alone CI and CI written as an acceleration of life cover, by volume 7

Maxine Udall and Ron Wheatcroft | 20 May 2016 Product % Change 2015/2014 IP to “retirement age” (excluding LPT)63,339 66, Income protection 1 year limited payment term2,200 2, Income protection 2 year limited payment term17,329 33, Income protection 5 year limited payment term9,402 2, Income protection 'other' limited payment term4,619 3, New individual IP sales split by duration of limited payment term, 2014 – 2015 by volume 8 Majority written to "retirement age" 38% of written on a limited payment term basis (34% in 2014)

Maxine Udall and Ron Wheatcroft | 20 May 2016 Product type * Guaranteed acceptance385,132314,869246,326243,181261,137 Non-linked14,24526,23026,44130,09232,550 Unit-linked1,3053, Total400,682344,110273,423273,991294,074 New WL sales, unit-linked, non-linked and guaranteed acceptance plans, by volume 9 - Guaranteed acceptance plans, usually targeted at the over 50s market or with the express purpose of paying for a funeral or expenses on death - Fully-underwritten non-linked products, such as those designed to mitigate inheritance tax - Unit-linked products.

Maxine Udall and Ron Wheatcroft | 20 May 2016 Group Watch In 2015, the number of people covered increased by almost 310,000  Long-term DI  1.3% (+27,644)  Death benefits  2.4% (+209,503)  Critical illness  15.0% (+71,426) Benefits in force have grown too  Long-term DI  4.2% (+£2.6bn per annum)  Death benefits  5.2% (+£54.7bn)  Critical illness  11.4% (+£3.2bn)

Maxine Udall and Ron Wheatcroft | 20 May 2016 Premiums have gone up too  Long-term DI  2.1%(+£13.6m)  Death benefits  3.6%(+£45.3m)  Critical illness  17.2%(+£12.5m) A generally good picture for scheme numbers  Long-term DI  0.0%(-8)  Death benefits  5.0%(+2,425)  Critical illness  7.8%(+222) Group Watch

Maxine Udall and Ron Wheatcroft | 20 May 2016 Group death benefits – number of people covered, Registered7,299,3397,468,7477,724,9067,765,2817,971,060 Excepted 311, , ,742391,438490,911 DISP 594, , ,132494,870399,121

Maxine Udall and Ron Wheatcroft | 20 May 2016 Non-pension life cover Critical illness Mortgage market Income protection Messages 13

Maxine Udall and Ron Wheatcroft | 20 May

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