Liberty Presentation: Achievements & Plans

1. 2005 Results Presentation to the Investment Analysts’ Society of Southern Africa 2 March 2006 www.liberty.co.za

2. Agenda What we said What we’ve done Financial and operating results Focus areas Questions

3. What we said … • Capital management continues • Compliance, IFRS … • Address PFA issues • ... people ... service … costs

4. What we said … • Operational restructuring and CAHL integration continues • Marketing and Distribution restructuring • Products • Channels • Project Khula continues • Group professional services restructuring and integration • … Hug our customers!

5. What we’ve done … Capital management • Bought CAHL utilising some excess capital • First life company in SA to issue capital qualifying bond • Sold significant portion of SAB - no remaining concentration risks • Sale of Prefsure and Hightree • Ermitage sale in progress • New dividend policy implemented • Capital reduction

6. What we’ve done … PFA issues • Statement of Intent signed with National Treasury • What the industry agreed to • Minimum standards applied to early termination values • Retrospective and prospective • Treasury’s promises • New commission regulations • Jurisdictional clarity (PFA, FSOS Ombudsman, LTI Ombudsman) • Recognition of application of Long-Term Insurance Act to RA policies • Resolution of other regulatory matters

7. What we’ve done … PFA issues • All business with savings as the primary purpose, is included • RA’s (with and without life cover) • Endowments • Whole of life (where savings is primary purpose) • Reversionary bonus business • Policies intended primarily to provide risk benefits, are excluded • Pure risk products (eg Lifestyle Protector) • Whole life business not included • A number of outstanding practicalities still to be finalised • Full provision for Statement of Intent (SOI) made at 31 December 2005

8. What we’ve done … Operational restructuring • Overview of new structure given at the interim results • Updated restructuring and integration progress given in November 2005 • Marketing and Distribution • Operations • Group Professional Services • Asset Management (Stanlib and Properties)

9. What we’ve done … Operational restructuring • Choice of IT platform finalised and project started • Life licenses under review • Recap of numbers • Restructuring and integration costs of R500m over 3-4 years • Anticipated cost reduction of R300m pa by 2008 • Estimated after tax net benefit of approximately R1bn • Restructuring and integration on track

10. What we’ve done … Products • New risk product (Lifestyle Protector) performing well • Sought more clarity on PFA rulings before launching new savings products • New long term savings product launch planned for later this month • Policyholder value proposition • Internal culture ‘we should only sell a product that we would be happy to sell to our mothers!’ • Increased advertising awareness of real benefits of RA’s

11. What we’ve done … Distribution • Agency restructured • Continued focus on broker relationships • Entry level market • Khula performance • CAHL Commercial/Khula agents consolidated (Liberty@Work) • Individual life bancassurance model still delivering • Awaiting finalisation of the commission proposal • SAFSIA Awards

12. Deon de Klerk

13. Operational features – 2005/2004 • Includes CAHL numbers for 9 months since acquisition • Includes CAHL numbers for 9 months for comparability where appropriate • Excludes STANLIB and Ermitage net cash inflows

14. Impact of SOI • Value of new business margins reduced to 20%

15. New business premiums Total R16 673m (+21%) Individual life R13 721m (+18%) Corporate benefits R2 952m (+39%) Indexed new business premiums Total R4 870m (+12%) Individual life R4 004m (+10%) Corporate benefits R866m (+26%) 15 000 5 000 12 500 4 000 10 000 3 000 7 500 2 000 5 000 1 000 2 500 0 0 2002 2003 2004 Inc CAHL 2005 Inc CAHL 2002 2003 2004 Inc CAHL 2005 Inc CAHL Rm Rm Individual Corporate Life insurance operations

16. Embedded value of new business* Total R882m (+8%) Individual life R845m (+3%) Corporate benefits increased from -R4m to +R37m New business EV margins Total = 23%* → 20% after SOI Individual life = 25%* → 23% after SOI Corporate benefits = 6%* → 6% unchanged 1 000 30% 25% 800 20% 600 15% 10% 400 5% 200 0% 0 -5% 2002 2003 2004 2005 Inc CAHL 2002 2003 2004 2005 Inc CAHL Rm Individual Corporate Life insurance operations * Before SOI impact

17. New business EV margins – PV of premiums basis * As reported

18. 6 000 4 000 2 000 0 -2 000 2002 2003 Inc CAHL 2004 Inc CAHL 2005 Rm Individual Corporate Life insurance operations • Net cash flows from insurance operations (excluding Stanlib & Ermitage) • Total R5 726m (+80%) • Individual life R4 948m (+4%) • Corporate benefits R778m (+149%)

19. 35% 30,6% 30% 27,2% 26,0% 25,4% 25,3% 24,5% 23,6% 22,8% 25% 20,3% 19,6% 20% 16,5% 15,5% 15% 10% 5% 0% Recurring Individual Single Individual Year ended 31 December 2002 Year ended 31 December 2000 Year ended 31 December 2001 9 months ended 30 September 2005 Year ended 31 December 2003 Year ended 31 December 2004 Life insurance operations • New business market share Source: LOA

20. Other operations • STANLIB: assets under management and funds under administration Net cash inflows of R13,3bn (R15,3bn in 2004) Earnings before tax of R407m up 46%

21. Financial results – 2005/2004

22. BEE normalised headline earnings before IFRS and SOI

23. Operating profit from life insurance operations– major influencing factors • Inclusion of CAHL for 9 months • Shareholders’ 10% participation and higher asset base • Risk profits • Investment guarantee reserve • Expenses • Costs per policy • Non-recurring expenses

24. 35% 30% 25% 20% 15% 10% 5% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Actuarial assumption 2005 Year-to-date return 2004 Year-to-date return 2005 Gross investment returns 9,7%

25. Expenses * CAHL costs included for 9 months in 2004 and 2005

26. Restructuring, integration and other non-recurring expenses Other non-recurring expenses of R36m

27. Maintenance costs per policy • For the year ended 31 March 2005 • Annualised • Consolidation of 63 000 policies into 1 policy during 2005 impacted per policy statistics

28. Embedded value

29. Capital adequacy cover

30. Capital reduction • Target CAR cover of 1,7 times • Excess capital of approximately R1bn • Capital reduction of R1bn or 360 cents per share • Subject to shareholder and regulatory approval

31. Dividend • At 2004 year end new dividend policy established • Dividend growth in line with current estimated medium term growth in embedded value(after normal dividends)

32. Bruce Hemphill

33. Addressing market concerns … • Insurance skills • Integration and restructuring • Good progress made in 2005 • CAHL staff relocated to Liberty • One team, good mix of CAHL and Liberty • Continuity • Group Executive • Rex Tomlinson/Bruce Hemphill on Exco for 24 months

34. Liberty priorities for the next 12 months • Customers • Customer service • Moral high ground • Leading product innovators • Real value to policyholders

35. Liberty priorities for the next 12 months • Systems and processes • Single IT platform • Efficient business model • Scalable

36. Liberty priorities for the next 12 months • People • Our people are the critical ingredient • Positive energy • Team environment • Enjoyable workplace

37. Questions

38. Appendices

39. Operating profit from shareholders’ funds

40. Embedded value (EV) reconciliation and ROEV build up * Net of allowance for fair value of options of -R54m

41. Embedded value (EV) reconciliation – 1H05 vs 2H05 • * Net of allowance for fair value of options of –R101m in 2H05 (1H05 R47m) • Annualised ROEV for 2H05 is 28% (1H05 16%)

42. IFRS NAV vs Statutory NAV

43. Stanlib detailed earnings analysis

44. Ermitage - assets under management • Net cash inflows of US$69m • Headline earnings of £6,67m (R77m) up 138%

45. Financial services and subsidiaries * The value of the IEB & CAHL business is included in the group's estimates of the VIF ** Restated for IFRS

46. New business excluding contractual increases - ex CAHL

47. Total premiums

48. New business EV analysis - ex CAHL • Indexed new business of CAHL for EV purposes R201m (Recurring R170m, single R31m) • CAHL NB embedded value of R69m • CAHL NB embedded value and volumes for 9 months only

49. Effect of the BEE transaction on headline earnings • As a consequence of utilising Liberty Life’s own cash flows (in the form of ordinary dividends paid) to service the empowerment transaction financing structure (in the form of dividends on preference shares), the dividends received on the empowerment preference shares will be accounted for directly in reserves, thereby offsetting the dividends so received against the ordinary dividends paid by the company • Due to the fact that the Black Economic Empowerment transaction is effectively accounted for as a share buy back (until such time that all funding is repaid), the weighted average number of shares in issue for 2004 has been reduced by 25,8million shares. The transaction was implemented on 8 November 2004

50. Effect of the BEE transaction on EV per share • Due to the fact that the Black Economic Empowerment transaction is effectively accounted for as a share buy back (until such time that all funding is repaid), the total number of shares has been reduced by 25 796 143 shares at 31 December 2005 and 31 December 2004