Financial Results Wednesday 7 April, 2004

1. Financial Results Wednesday 7 April, 2004

2. Cautionary note on forward-looking statements This presentation includes forward-looking statements. These statements are based on currently available information and consistent accounting policies as applied at 31 December 2003. They reflect Lloyd’s current expectations, projections and forecasts about future events and financial performance. All forward-looking statements address matters that involve risks, uncertainties and assumptions. Based on a number of factors, actual results could vary materially from those anticipated by the forward-looking statements. These factors include, but are not limited to, the following: • Rates and terms and conditions of policies may vary from those anticipated. • Actual claims paid and the timing of such payments may vary from estimated claims and estimated timings of payments, taking into account the preliminary nature of such estimates. • Claims and loss activity may be greater or more severe than anticipated, including as a result of natural or man-made catastrophic events. • Competition on the basis of pricing, capacity, coverage terms or other factors may be greater than anticipated. • Reinsurance placed with third parties may not be fully recoverable, or may not be paid on a timely basis, or such reinsurance from creditworthy reinsurers may not be available or may not be available on commercially attractive terms. • Developments in the financial and capital markets may adversely affect investments of capital and premiums, or the availability of equity capital or debt. • Changes in legal, regulatory, tax or accounting environments in relevant countries may adversely affect (i) Lloyd’s ability to offer its products or attract capital, (ii) claims experience, (iii) financial return, or (iv) competitiveness. • Economic contraction or other changes in general economic conditions could adversely affect (i) the market for insurance generally or for certain products offered by Lloyd’s, or (ii) other factors relevant to Lloyd’s performance. The foregoing list of factors is not comprehensive, and should be read in conjunction with other cautionary statements that are included herein or elsewhere. Lloyd’s undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

3. Agenda • Introduction Lord Levene Chairman • 2003 Results Nick Prettejohn Chief Executive • Questions

4. 2003 Results - highlights • Profit of £1,892m* for 2003 (£834m for 2002) • Further reduction in combined ratio to 90.7% (2002: 98.6%) • Initial profit projection of £1,780m for 2003 underwriting year (3 year accounting basis) • 39% increase in central assets to £781m • Net resources up 35% to £10.1bn *Pro-forma annual accounting basis

5. Annual accounting results *Pro-forma annual accounting basis

6. 2003 Annual accounting results Premiums *Pro-forma annual accounting basis

7. 2003 Annual accounting results Outwards reinsurance premiums *Pro-forma annual accounting basis

8. 2003 Annual accounting results Premiums: on-going businesses *Pro-forma annual accounting basis

9. Annual accounting results *Pro-forma annual accounting basis

10. 2003 Annual accounting resultsNet catastrophe losses Source: Syndicate quarterly returns

11. 2003 Results – reserve strengthening *Pro-forma annual accounting basis

12. Annual accounting results *Pro-forma annual accounting basis

13. Annual accounting results *Pro-forma annual accounting basis

14. Annual accounting results *Pro-forma annual accounting basis

15. % 110 98.6 100 90.7 90 80 70 60 50 2002 2003 Lloyd's combined ratio *Pro-forma annual accounting basis

16. Lloyd's: performance by class of business2003Calendar year combined ratios *Pro-forma annual accounting basis at syndicate level

17. % 130 120 110 100 121.3 113.3 90 107.5 80 101.4 101.2 100.7 98.6 70 90.7 60 50 Lloyd's* European P/C & R/I US P/C Industry (ii) US R/I Industry (iii) Industry (i) 2002 2003 Lloyd's vs Industry 2003 Combined Ratios Sources i) Company data, ii) Insurance Information Institute estimate, iii) Reinsurance Association of America *Pro-forma annual accounting basis

18. 2001 account result (2,378) 2002 account projection 1,671 2003 account projection 1,780 Underwriting year result & projection £m * Three year accounting basis

19. Net incurred loss ratio development1998-2003 Source: Lloyd’s audited annual accounts NB All ratio denominators are Q12 actual or estimated ultimate premiums for open years

20. Net incurred loss ratio development1993-1997 vs 2002 & 2003 Source: Lloyd’s audited annual accounts NB All ratio denominators are Q12 actual or estimated ultimate premiums for open years

21. Balance Sheet

22. Lloyd’s central assets

23. Lloyd’s central assets

24. 2003 central assets – Central Fund arbitration • Net potential exposure same as last year • Arbitration due later this year • Lloyd’s position unchanged

25. Central assets – post 9/11 target achieved $1,398 @ USD 1.79 $1,188 @ 2001 exchange rates

26. No increase in capacity 2004 vs 2003 Source: 2003 final stamp capacity, 2004 first stamp capacity. QQS latest business plan estimates

27. Premium rating index 2003 2002 2003 2004 Calendar year combined ratios Casualty 100 121 130 110.4 Property 100 103 98 89.4 Reinsurance 100 104 102 89.3 Motor 100 107 106 93.6 Marine 100 115 121 89.7 Energy 100 104 96 83.4 Aviation 100 98 94 93.0 Market conditions remain attractive *Pro-forma annual accounting basis

28. UNDERWRITING PROFIT Industry fundamentals – the same one year on External Influences Lloyd’s Influences Franchise Implementation Capital Markets Industry Reserve Strengthening

29. 2003 – A year of continued progress • Implementation of the Franchise • Transition towards limited liability • Move to annual accounting • Progress on Business Process Reform

30. Summary – Another year of progress and profit • A year of continued progress against strategic objectives • A year of strong financial results • £1.9 billion profit, helped by low catastrophe losses but after reserve strengthening • Combined ratio of 90.7%, outperforming our international peer group • Substantial increase in balance sheet resources (central assets up 39%, net resources up 35%) • Market conditions attractive and fundamentals unchanged • No room for complacency *Pro-forma annual accounting basis

31. Financial Results Wednesday 7 April, 2004