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2. 2 Presentation to Investment Analysts’ Society 3 rd /4 th March 2004 www.liberty.co.za

3. 3 Operating climate Increasing compliance and regulatory requirements Low interest rate/low inflation environment Strengthening of the Rand Volatile investment markets Risk averse investors Perception of industry

4. 4 Operations

5. 5 Liberty Personal Benefits - market share Strong Excelsior investment product sales Property-backed products very popular Risk product launched – Lifestyle Protector R120 million sales since launch

6. 6 Liberty Personal Benefits – average recurring premiums All offices Large offices Liberty Personal Benefits LPB as % of all offices LPB as % of large offices 30 Sept 2003* Rm 31 Dec 2002 Rm % Change 2 141 2 843 6 796 316,2% 238,1% 2 298 2 754 6 443 280,4% 234,0% (7 3 5 ) * Source: LOA statistics

7. 7 Liberty Personal Benefits Represents 70% of total business based on value of liabilities (low percentage smoothed bonus business) Focus on: Integration of Healthcare operations Restructuring of operations Customer service and costs Implementation of FAIS legislation Partial commission uncapping Further leveraging channel capabilities

8. 8 Liberty Corporate Benefits 9% reduction in headcount Building on packaged product model Focusing on service delivery Risk margins maintained (despite HIV/AIDS) Standard Bank opportunity Small pension fund audit exemption withdrawal

9. 9 Liberty Corporate Benefits (continued) IEB purchase price: R130 million Smooth integration to date 2-3 years to rationalise fully Efficiency opportunity Current performance approximating expectations

10. 10 Consultancy Agency Division –Introduction of graduated managers from the Academy –Additional branches created Franchise Division –Elimination of non-producing franchises –Productivity enhanced

11. 11 Consultancy (continued) Broker Division –Expanded number of supporting brokers –Gauteng focus –Administration hubs provide a higher level of service SBFC –Increased manpower – benefits in 2004 –Consumer consultants strategy

12. 12 Consultancy (continued) Legislation –FAIS implementation –Commission de-regulation –FICA implemented

13. 13 Properties Portfolio value (Rm) Comprising: Office buildings (%) Shopping malls (%) Hotels (%) Other (%) 20032002 % Change 10 449,8 20 65 12 3 100 9 601,8 22 64 11 3 100 9 5 year compound annual bonus rate to RA policy- holders of 11,6% vs headline CPI of 5,2%

14. 14 Properties (continued) Property sales amounted to R150,1 million in 2003 Liberty Midlands Mall completed in 2003 - valued at R325 million 50% of Greenacres Shopping Centre acquired for R150 million Vacancies at 31 December 2003: 13,9% (2002 : 12,1%)

15. 15 STANLIB Total assets under management (excluding common assets) Life funds Segregated funds Unit trusts Structured products and other Money market as % of total 59 55 40 24 178 14% 53 48 29 19 149 11% 12 15 38 26 19 2003 Rbn 2002 Rbn % Change

16. 16 STANLIB (continued) Net inflows positive R12 billion Investment performance mixed: –Good fixed interest performance –Balanced portfolios underperformed median by 1% to 2% –Returns generally acceptable in absolute terms Normalised earnings up 4% to R136 million

17. 17 STANLIB (continued) Integration costs and other once-off costs higher than expected Staff numbers reduced by 98 people (net) Annualised cost saving of approximately R30 million STANLIB brand now well-established in both retail and institutional markets Looking for improved investment performance

18. 18 Ermitage Assets under management Hedge funds Long-only funds Money funds Third party funds as % of total funds 1 292,7 1 059,5 600,3 2 952,5 41% 806,8 791,6 667,3 2 265,7 44% 60 34 (10 30 ) 2003 US$m 2002 US$m % Change Operating profit up 117% in Pounds Sterling

19. 19 The year in numbers

20. 20 Features – 2003/2002 Indexed new business –Individual –Corporate Value of new business Net cash inflows from insurance operations New business margin 3 807,8 3 184,3 623,6 608,9 4 497,0 20% 3 634,2 3 090,2 544,1 604,6 4 501,3 20% 5 3 15 1 - 2003 Rm 2002 Rm % Change

21. 21 Features – 2003/2002 (continued) Headline earnings per share (cents) Headline earnings per share pre AC 133 (cents) Final dividend per share Embedded value per share: (Rand) Capital adequacy requirement (times covered) 346,4 359,6 116,0 57,58 2,6 391,5 116,0 55,28 3,0 (11 (8 - 4 2002 % Change 2003 ))))

22. 22 Headline earnings Operating profit from insurance operations net of tax Revenue earnings – shareholders’ funds Preference dividend Headline earnings Headline earnings pre-AC 133 2003 Rm 2002 Rm % Change ) ) 719,5 324,8 (95,2 949,1 985,5 889,1 261,6 (81,9 1 068,8 (19 24 16 (11 (8 ) ) )) ) )

23. 23 Operating profit from insurance operations Operating profit from insurance operations Before AC 133 adjustment AC 133 adjustment 2003 Rm 2002 Rm % Change 2002 includes releases from the life fund of approximately R350 million after tax Improvement in weighted policyholder investment portfolio in 2003 Implementation of AC 133 719,5 755,9 (36,4 889,1 (19 (15 ) ) )

24. 24 Investment returns (Weighted average of equity, managed and foreign assets portfolios)

25. 25 Expenses Total group expenses Subsidiaries Company expenses Insurance expenses Individual Corporate Benefits 20032002 % Change 1 860,9 (381,8 1 479,1 1 281,8 935,1 346,7 1 690,9 (462,6 1 228,3 1 150,6 864,4 286,2 10 (17 20 11 8 21 ) ) ) *Includes IEB costs of R33 million *

26. 26 Expenses – cost per policy Renewal cost per policy increased/(decreased) by Acquisition cost per policy increased/(decreased) by 2003 % 2002 % Significant non-recurring expenses incurred in 2003 6,5 7,2 (1,6 (1,3 ) )

27. 27 Non-recurring expenses Non-recurring expenses of R111,3 million in 2003 –Retrenchment and discontinued salary costs –Previously incurred corporate activity costs –Pension fund provision –Post-retirement medical liability increase –Retention bonuses –Non-capitalised renovation costs –Impairments and other provisions

28. 28 Revenue earnings – shareholders’ funds Financial services operations Listed investments Other 2003 Rm 2002 Rm % Change 199,9 32,9 92,0 324,8 159,6 39,9 62,1 261,6 25 (18 48 24 ) Electric Liberty investment portfolio trading profit of R47 million in 2003 Liberty Ermitage headline earnings of R43 million up 54% Higher cash balances and preference shares increased other earnings

29. 29 Future earnings International Accounting Standards Stochastic modelling of investment guarantees Investment returns impact 10% entitlements

30. 30 Embedded value Shareholders’ funds Net value of life business in-force Fair value adjustment Total Embedded value per share (Rand) 2003 Rm 2002 Rm % Change 8 782,2 6 493,8 540,9 15 816,9 57,58 8 588,1 5 700,4 838,1 15 126,6 55,28 ) 2 14 (36 5 4

31. 31 Fair value adjustment Liberty Group Properties Liberty Ermitage Jersey STANLIB Carrying value of in-force business acquired from Investec Employee Benefits 2003 Rm 2002 Rm 216,0 140,0 306,9 (122,0 540,9 240,0 190,4 407,7 838,1 ) Liberty Ermitage multiple reduced from 15 to 10 STANLIB valued at approximately R1,4 billion

32. 32 New business – percentage increase Recurring Single Total Index Individual Business % Corporate Business* % Total % 6 (7 (4 3 1 63 47 15 63356335 )))) *Excludes IEB business acquired

33. 33 Market share individual business (including Charter) Individual recurring Individual singles 30 Sept 2003 % 31 Dec 2002 % 23,5 22,4 23,6 20,2 Sales force productivity Independent broker support Investment performance Property portfolio Lifestyle protector Source: LOA stats plus Charter Life

34. 34 Value of new business Value of new business (Rm) New business margin (%) Individual (%) Corporate (%) 20032002 608,9 20 22 8 604,6 20 22 11

35. 35 Net fund inflows Total premiums and inflows under investment contracts Claims, policyholder benefits and payments under investment contracts Net fund inflows 2003 Rm 2002 Rm % Change 18 121,8 13 624,8 4 497,0 16 415,1 11 913,8 4 501,3 10 14 - Two investment only funds to STANLIB of approximately R700 million

36. 36 Capital adequacy cover Capital adequacy requirement (Rm) Times covered 3 402,7 2,6 2 856,6 3,0 2003 2002 Charter Life investment guarantees

37. 37 Dividend 2003 cents per share 2002 cents per share 162 116 278 162 116 278 Interim Final

38. 38 When we last spoke…

39. 39 Focus areas for second half 2003 Improve service levels Emphasis on cost reduction Domestic operations/other market segments and Africa Renewed emphasis on people Address capital situation

40. 40 Since we last spoke…

41. 41 Improve service levels Appointed MD Group Customer Service – Alan Woolfson Appointed internal ombudsman Launching staff initiative Tracking system for complaints

42. 42 Cost reduction Cost reduction initiated – second half 2003 Cost savings of approximately R75 million for Liberty Reduced net headcount –Liberty: 135 –STANLIB: 98 General staff incentive scheme introduced based on cost reduction targets No real cost growth budgeted for 2004

43. 43 Domestic operations/other market segments and Africa Some internal issues – –LPB restructure –IT centralised (again) –Finalised Healthcare integration into LPB Charter explores new opportunities (see next slide) Namibia life license Stanbic Africa footprint offers future opportunity Canned future offshore expansion for now Western Cape?

44. 44 Business as usual New business initiatives Charter Life 2004 Customer service Cost management Right people - right jobs - Grow CC’s aggressively - Continue IFA’s, networking and Liberty Agency/Franchise (Long-term repositioning strategy) - LSM 5-8 - Products - Administration - Marketing - Distribution Charter Life – eventually doing something

45. 45 People Four new board appointments Appointed MD Charter Life – Bobby Malabie Appointed CEO STANLIB – Bruce Hemphill Looking for marketing head IEB staff integrated well Employment equity remains an issue Restructured STANLIB

46. 46 Capital management More proactive capital management Capital committee formed Sold 2 million Edcon and 1 million GoldFields Restructured and cleaned up portfolios Overcapitalised – but –BEE contingency –stochastic modeling –be patient!

47. 47 In addition… Market uptick – thank heavens! Financial Sector Charter signed –Dedicated Exco member heading initiative –Implementation committee set up STANLIB BEE deal finalised AC 133 implemented Life product launched

48. 48 Liberty Foundation – focus on education Mindset Network began broadcasting Pilot programme initiated for Health Channel and we continued with – –Liberty Learning Channel on SABC –Learn.co.za website –Liberty/Sunday Times ReadRight project Working closely with Standard Bank

49. 49 Focus areas for next six months – nothing complicated Continue - to improve service levels emphasis on cost reduction focus on domestic operations/other market segments and Africa emphasis on people

50. 50 Focus areas for next six months – nothing complicated Continue – monitoring capital position Financial Sector Charter implementation and in addition we will – reposition brand focus on product development

51. 51 Focus areas for next six months – nothing complicated Everything we do must focus on adding value for our customer

52. 52 Panel Myles RuckChief Executive Andrew Lonmon-DavisStatutory Actuary Deon de KlerkChief Financial Officer

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