Liberty Life UBS Financials Conference “The Turning Points For Our Business” Myles Ruck CEO

1. Liberty Life UBS Financials Conference“The Turning Points For Our Business”Myles RuckCEO October 2005

2. Agenda Liberty Turning Points Industry Turning Points The Future Questions

3. Liberty’s turning points • A brief history • 1974 Liberty acquired SA operations of Sun Life • 1978 Liblife Controlling Corporation formed with Standard Bank (SBK) • 1983 Joint control of Premier Group, which acquires 35% of SAB • 1987 Liberty increases stake in SBK to over 30% • 1987 Prudential Assurance becomes wholly owned subsidiary • 1991 Investment in SBK increases to 39% • 1993 Libsil established to hold Liberty strategic assets

4. Liberty’s turning points-historical structure Standard Liblife Liberty 50% 21.8% 50 % Controlling Bank Investors Corporation Investment Limited (Pty) Corporation Limited Limited 54.9% Liberty Holdings Limited 45.4% 53.9% Guardian Liberty Life National Association of Insurance Company 6.1% Africa Limited Limited 54.8% 94.0% 100% 100% 82.5% 100% 100% 100% (4) Millennium Liberty Financial Charter Liblife Liberty First Liblife Guardbank Life Consultants Life International Asset Insurance International and Management Strategic Properties BV Company Management Investment Trust Netherlands Corporation (Pty) Investments Limited Limited Services Limited Limited Ltd Limited (Pty) Ltd 41.5% 31.8% 39.1%* 41.6%* 28.1%* Beverage Liberty Standard and International Consumer The Premier Bank Holdings Group Industry Investment PLC Limited Holdings Corporation (UK) Limited Limited 100% 71.8% 100.0% 28.5%* Liberty Capital Capital & The South International Shopping Counties African Financial * Effective interest Centres PLC (UK) Breweries Services PLC (UK) (UK) Limited

5. Liberty’s turning points-historical EV At 31 December 1998

6. Liberty’s turning points • Changing the investment trust • 1999 unbundling of FIT • 1999 Distribution of direct holding in Liberty International • 1999 Unbundling of Libsil to LGL level • 1999 sale of Guardian National • 1999 Change of control to Standard Bank • 1999 Appointment of Roy Andersen (Donald Gordon retires) • 2000 Dispose of Liberty International

7. Liberty’s turning points-improving structure Stanbic 55% Liberty Holdings (“Libhold”) 56% Liberty Life 8% SAB plc 100% Liberty Asset Management 100% Liberty Healthcare 100% Liberty Properties 100% Charter Life 94% Millennium Financial Consultants 100% Oracle Employee benefits 100% Guardbank Management Corporation As at April 2001

8. Liberty’s turning points-EV more focused EV is as reported

9. Liberty’s turning points • Relationship with Standard Bank • The change in control in 1999 had a positive impact on relationship • Liberty structure had changed radically • Formal bancassurance agreement entered into in 1999 and revised in 2002 • Stanlib formed in 2002 • New CEO from Standard Bank in June 2003 • Other initiatives • IT outsourcing JV • Management development programs • BEE

10. Bancassurance • Bancassurance has performed well (Rm) • Total new bancassurance premiums

11. Stanlib-Created in 2002 • Strong performance

12. Liberty’s turning points • Stopped the offshore expansion • 2003- decision taken to focus on local business • International distribution -Hightree • Merchant Investors Assurance • Ermitage sale initiated in 2005 • We may however follow SBK into African retail territories • We may still enter the closed book market in time

13. Liberty’s turning points • Significant senior management changes made • The only way to change attitude and culture is to start from the top • Working hard to eliminate the ‘entitlement factor’ • Ongoing transformation at Liberty • Fresh ideas need fresh management

14. Liberty previous management structure • Executive management committee RoyAndersen HyltonAppelbaum MarkBloom AndrewLonmon-Davis IanMaron MikeJackson Deonde Klerk LeanneDewey ThembaGamedze JimMcLean RonMitchell DavidNohr MikeGarbutt LeeIzikowitz CraigLawrence DanPienaar MartinSmale AlanWoolfson

15. Liberty management structure changes • Executive management committee RoyAndersen HyltonAppelbaum MarkBloom AndrewLonmon-Davis IanMaron MikeJackson Deonde Klerk LeanneDewey ThembaGamedze JimMcLean RonMitchell DavidNohr MikeGarbutt LeeIzikowitz CraigLawrence DanPienaar MartinSmale AlanWoolfson

16. Liberty-current management structure • Group Executive Committee, a number of new faces Rex Tomlinson Ian Kirk Myles Ruck Deonde Klerk Audrey Mothupi Hennie Nortje Martijn Appelo AndrewLonmon-Davis LeeIzikowitz Bobby Malabie AlanWoolfson Bruce Hemphill IanMaron

17. Liberty’s turning points • Remained committed to face-to-face distribution • We have consistently looked to grow our distribution • Avoided the cutbacks that some of our competitors embarked on • Were first to introduce the franchise agency concept • Bancassurance has been a critical success factor • Entering the emerging market in a cautious way • Continue to monitor the efficiency not just the absolute level of sales staff

18. Liberty’s turning points 35% 32.0% 30% 27.2% 26.0% 25.3% 25.3% 24.5% 23.6% 25% 22.8% 20.3% 19.6% 20% 16.5% 15.5% 15% 10% 5% 0% Recurring Individual Single Individual Year ended 31 December 2000 Year ended 31 December 2001 Year ended 31 December 2002 Year ended 31 December 2003 Year ended 31 December 2004 Three months ended 31 March 2005 • New business market share Source: LOA market share statistics for all life offices

19. Liberty’s turning points • BEE deals finalised • Initial BEE deal done at Stanlib level • 25,2% sale to Safika Consortium • A successful LBO • November 2004 Liberty finalised BEE deal • Shanduka and Safika 3.7% • Black staff 3.7% • Community Trust 1.9%

20. Liberty’s turning points • Capital management received significant attention • Introduced capital management committee in Nov 2003 • Cleaned up the balance sheet • Shed equity concentration risks and liquidated trading portfolio • New dividend policy established • First life assurance company in SA to issue debt • Utilised excess capital to buy CAHL

21. Liberty’s turning points • Capital Alliance (CAHL) acquisition • A marriage of strong distribution and operational focus • Liberty’s new management team up for the challenge • Significantly scales up our operations (1.8m to 3.0m policies) • Facilitated planned organisational restructure at Liberty (at some cost) • CAHL has experience to significantly lower operational risk • Improvement of processes to improve efficiency

22. Liberty operational structure Liberty Properties LCB Individual Life Individual Life Liberty Ermitage LPB Bancassurance Group Life Liberty Healthcare Consultancy Project Khula Distribution Support Services Support Services Support Services • The past Insurance operations Other operations Liberty Group Limited Liberty Active CAHL

23. Liberty operational structure • The present Assetmanagement Marketingand distribution Operations Group support services

24. CAHL time line Implement acquisition Implementnew structure Plan phase I Integration and methodology – phase I – start with Liberty Active Plan phase II Integration phase II 2005 2006 2007 … people … service … costs … • More detail will be presented on the CAHL integration end Nov 2005

25. Agenda Liberty Turning Points Industry Turning Points The Future Questions

26. Industry turning points • Regulatory environment increasingly difficult • FAIS • FICA • PPR • Audit on pension funds • Foreign exchange changes • Surplus Apportionment Act • PFA rulings

27. PFA Rulings • 3 Major issues have been ruled on by PFA • Illustrative maturity values • Inflationary increases on guaranteed annuities • Early termination or reduced premiums on retirement annuities • …lets deal with the facts and the implications

28. Rulings we consider illogical Rulings we consider illogical • Issue 1-Illustrative maturity values (IMV) • This has never been a guarantee, although some clients may have seen it as such • In the Sanlam case, the illustrative real return was less than actual achieved, yet still ruled against Sanlam (De Beer case) • IMV showing 15% plus returns was appropriate for a 15% inflationary environment • New policyholder quotations showing reduction in yield (RIY) • Expect a decision on De Beer case by end October 2005

29. Rulings we consider illogical Rulings we consider illogical • Issue 2-Guaranteed annuities (GA) • At the time of purchasing an annuity, client decides on options • Fixed, living, escalating, joint life, guaranteed, or other • We price an annuity based on the client’s choice • We can’t give something for nothing • Pensions Fund Act requires inflationary increases • Favourable senior counsel opinion obtained and provided to FSB

30. Rulings that may have some merit • Issue 3-Retirement annuities (RA) • The problem has been with early termination (paid up and lapse), reduction in premiums and early retirement • The industry needs to accept that the product has not been flexible enough for clients • It is this that causes clients to feel ‘fleeced’ • There is no doubt that both the client and the life company make more money in the long term if the client keeps paying • Upfront costs are the problem, both commission and life company acquisition costs

31. Agenda Liberty Turning Points Industry Turning Points The Future Questions

32. Liberty’s future turning points • A change in attitude and the way we do business • A focused single platform will enhance customer service, reduce costs and improve value proposition for client • Totally re-vamped investment product • Lower margin, higher volume ?

33. Liberty’s future turning points • A change in attitude and the way we do business • Resolution of PFA issues • Financial Sector Charter implementation • Solution to access by lower income markets an industry imperative

34. Agenda Liberty Turning Points Industry Turning Points The Future Questions