Group Watch and Term & Health Watch 2017 Ron Wheatcroft, Protect Association, 19 May 2017

Group Watch 2017 - high level data summary

Group Watch 2017 In 2016, the number of people covered increased by almost 520,000 (516,365), an increase of 4.5% Long-term DI  6.3% (+132,930) Lump sum death benefits  4.3% (+366,464) DISP  6.8% (-23,151) Critical illness  7.3% (+40,122) Benefits in force have grown too Long-term DI  9.1% (+£5.9bn per annum) Lump sum death benefits  4.4% (+£58.0bn) DISP  6.8% (-£303.6m per annum) Critical illness  9.0% (+£2.9bn)

Group Watch 2017 Premiums have gone up too overall Long-term DI  5.3% (+£34.1m) Lump sum death benefits  4.0% (+£44.9m) DISP  6.2% (-£10.7m) Critical illness  11.5% (+£9.8m) A good picture for policy numbers Long-term DI  0.0% (+57) Lump sum death benefits  3.5% (+1,675) DISP  10.3% (-306) Critical illness  8.1% (+249)

Group risk total in-force premiums, 2016 Death benefits Long-term DI CI Total Premiums 1,329,872,581 681,784,625 94,889,094 2,106,546,300

Group long-term disability income – split of policies by size of membership, 2016 Number of members Number of policies % policies in force Fewer than 10 5,550 32% 10-49 6,225 36% 50-250 3,590 21% Greater than 250 1,803 11%

Group death benefits – number of people covered, 2012 - 2016 2013 2014 2015 2016 Registered 7,468,747 7,724,906 7,765,281 7,971,060 8,183,943   Excepted 344,889 334,742 391,438 490,911 644,492 DISP 575,943 514,132 494,870 399,121 375,970

Term & Health Watch 2017 - high level data summary

2016 in summary Volume Premium Term assurance 5% Term assurance 5.5% Term only 7.1% Term with CI 0.6% Critical illness 1% Accelerated CI 0.6% Stand-alone CI 7.2% Income protection 9.8% Whole life 2.6% Guaranteed acceptance 5.8% Fully-underwritten -22.3% Term assurance 5.5% Term only 8.6% Term with CI 1.7% Critical illness 1.6% Accelerated CI 1.5% Stand-alone CI 3% Income protection 11% Whole life 2.7% Guaranteed acceptance 10.1% Fully-underwritten -10.4%

Distribution split Distribution by product line, % market share 2016* Tied Directly-authorised Direct Bancassurance Term assurance 13.1 68.1 10.7 8.1 Critical illness (CI) 16.8 70.0 4.0 9.2 Income protection (IP) 17.9 79.2 0.5 2.5 Distribution by product line, % changes 2016/2015 Tied Directly-authorised Direct Bancassurance Term assurance 10.4 -1.6 16.5 -16.9 Critical illness (CI) 12.8 -1.2 -6.7 -7.0 Income protection (IP) 0.1 -0.6 15.2 17.7 *Directly-authorised refers to any business of that nature, including IFAs. It isn't pure IFA business.

Total new individual term sales split by LTA, DTA, family income benefit and other term sales, 2014-2016 by volume Product type 2014 2015 2016 % change 2016/2015 LTA without CI 522,649 555,907 594,216 6.9 Relevant life 16,372 21,790 27,746 27.3 LTA with CI 211,694 203,945 201,614 -1.1 DTA without CI 239,001 225,582 247,213 9.6 DTA with CI 232,043 196,174 199,253 1.6 FIB without CI 25,748 24,680 25,803 4.6 FIB with CI 2,770 2,854 2,599 -8.9 Other term without CI 29,165 24,766 18,311 -26.1 Other term with CI 6 88 2,212 2,413.6 Total 1,279,448 1,255,786 1,318,967 5.0

Top five product providers for new individual term sales (including term with CI), 2015–2016, by volume 2016 Rank Provider Total % of total 2015 position 1 Legal & General 429,524 33 2 Aviva 190,364 14 3 Royal London 135,699 10 5 4 Zurich 95,054 7 Friends Life 91,175 71% of market share with top 5 providers 2015 Rank Provider Total % of total 2014 position 1 Legal & General 450,737 36 2 Aviva 192,505 15 3 Friends Life 112,155 9 4 Zurich 100,327 8 6 5 Royal London 97,810

Top five providers for new individual CI sales, including stand-alone and accelerated life cover, 2015 – 2016 2016 Rank Provider Total % of total 2015 position 1 Legal & General 122,856 28 2 Aviva 52,421 12 3 VitalityLife 52,317 4 Friends Life 49,586 11 5 Royal London 43,845 10 74% of market share with top 5 providers 2015 Rank Provider Total % of total 2014 position 1 Legal & General 131,430 31 2 Friends Life 63,206 15 3 Aviva 55,310 13 4 VitalityLife 51,528 12 5 Royal London 37,246 9 6

Total new individual IP sales by volume, 2012 – 2016

New individual IP sales split by duration of limited payment term, 2015–2016 by volume Product  2015 2016 % Change 2016/2015 IP to “retirement age” (excluding LPT) 66,167 58,661 -11.3 Income protection 1 year 2,383 3,314 39.1 Income protection 2 year 33,271 46,041 38.4 Income protection 5 year 2,360 1,948 -17.5 Income protection 'other' 3,121 7,850 151.5 Percentage of sales to retirement age equal to the total written to a LPT 50.2% of new IP business LPT (38% in 2015 and 34% in 2014)

Top five product providers, new individual income protection sales by policy count, 2015-2016 Rank Provider Total % of total 2015 position 1 LV= 32,621 28 2 Friends Life 27,643 24 3 Legal & General 10,311 9 4 Royal London 9,628 8 5 Aviva 8,224 7 2015 Rank Provider Total % of total 2014 position 1 LV= 34,470 32 2 Friends Life 26,265 25 3 Legal & General 10,379 10 4 Aviva 6,598 6 7 5 Royal London 5,840

New WL sales, unit-linked, non-linked and guaranteed acceptance plans, 2012-2016 by volume Product type 2012 2013 2014 2015 2016 Guaranteed acceptance 314,869 246,326 243,181 261,137 276,164 Fully-underwritten 29,241 27,097 30,810 32,937 25,605 Total 344,110 273,423 273,991 294,074 301,769 Guaranteed acceptance plans, usually – but not always – 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 and unit-linked products such as whole life with CI.

Fully-underwritten WL sales, 2014-2016 by volume Distribution channel Non-linked   2014 2015 2016 % change 2015/2016 Directly-authorised 29,208 29,545 21,698 -26.6 Tied 966 2,682 2,991 11.5 Direct 624 96 117 22.2 Bancassurance 12 614 799 30.1 Total 30,810 32,937 25,605 -22.3 Product Average sum assured (£) Average premium (£) Guaranteed acceptance 4,224 255 Fully-underwritten 109,652 1,264 Product Average sum assured (£) Average premium (£) Guaranteed acceptance 4,224 255 Fully-underwritten Range of average sum assured (£) Range of average premium (£) Max 811,655 3,816 Min 21,801 541

Top five product providers, new individual whole life sales, 2015-2016 Rank Provider Total % of total 2015 position 1 SunLife 118,051 39 2 Legal & General 34,986 12 3 Scottish Friendly 33,216 11 - 4 Aviva 21,452 7 5 Royal London 18,932 6 2015 Rank Provider Total % of total 2014 position 1 SunLife 137,619 47 2 Legal & General 35,885 12 3 Aviva 29,719 10 4 LV= 19,807 7 5 VitalityLife 18,218 6

Legal notice ©2017 Swiss Re. All rights reserved. You are not permitted to create any modifications or derivative works of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re. The information and opinions contained in the presentation are provided as at the date of the presentation and are subject to change without notice. Although the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage or loss resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial or consequential loss relating to this presentation.