norwichunion.com Catching the wave of wealth management Nicholas A Smith

Catching the wave of wealth management Nicholas A Smith Managing Director UK Wealth Management 29 March 2001

2 The service has all the right ingredients, it embraces open architecture on asset management products and offers online banking and trading, in addition to the core life insurance and protection products of the Group, through a variety of direct channels Source: Converging on the Mass Affluent Feb 2001

CGNU - a dynamic worldwide group 3 6th largest insurance group in the world Premiums/Sales* 4% 18% 7% 27bn premium income 220bn of assets under management 15 million customers worldwide Top 5 life company in Europe No.1 insurance group in the UK 36% International Life Europe Life 27% 8% International General Europe General UK Life UK General *Ongoing business. Life includes retail investment sales and health premiums

Portfolio of leading businesses - the strongest platform in continental Europe of any UK financial services company 4 Long Term Savings i Number 1 in UK i Top 3 in Netherlands and Poland i Top 5 in Ireland and Turkey i Top 10 in France, Italy and Spain Fund Management i Number 2 UK based asset manager i Top 10 in Europe General Insurance i Number 1 in UK, Ireland, Canada and New Zealand i Top 5 in Netherlands and Australia

CGNU has a strong track record in applying new technologies and transferring best practice 5 Re-engineering the value chain Electronic Data Interchange Online policyholder information Enhancing the effectiveness of existing distribution channels e-enablement of product Intermediary extranets Strategic alliances Developing new e-business models to capture new customers and improve cross sales capability assertahome.com Transferring best practice Interactive Digital TV Navigator / NU International Nuts Ohra Poland

Norwich Union - a market leader pushing boundaries in the UK 6 Norwich Union - No1 Insurance-based financial services group in the UK A top financial services brand Over 4m Long Term Savings (LTS) customers LTS new business sales in 2000-7.5bn 2.2bn maturing policy proceeds to 114k customers in 2001 85% of existing customers have income between 20k - 40k

CGNU - moving decisively towards asset gatherer 7 % of premium income* 80 70 60 50 40 30 20 10 0 1997 1998 1999 2000 General Long Term Savings * Total premiums written (after reinsurance). CGU and Norwich Union combined. Long Term Savings includes investment sales and health premiums.

The mass affluent opportunity - our perspective on the Commerzbank analysis 8 Mass affluent is a significant and rapidly growing segment Primary needs come before product needs. Customers want integrated-channel, multi-product offering and support at point of purchase Traditional players need to demonstrate ability to build new business models and embrace open architecture product solutions Providers need to harness the power of technology to transform manufacture and delivery Providers need sufficient scale to enable a European footprint CGNU is a transformer but not a shaper?

UK market a major opportunity - personal disposable income has doubled over the last 10 years, with the wealthiest 28% of the population making up 84% of the savings market 9 UK Personal Disposable Income, 1987-1997, m UK Distribution of Savings, 1999, % m 700 600 500 505,401 534,972 568,746 7% 5% 6% 10% 16% 42% > 50,000 400 300 200 100 0 286,161 1987 1995 1996 1997 31% 26% Population % 13% 13% 16% 7% 5% 5% Savings % 30,000-46,999 20,000-29,000 10,000-19,000 5,000-9,999 500-4,999 < 500 This has led to the emergence of a broad based mass affluent segment with an increasing ability to invest. Source: ONS, Social Trends 2001 ; Financial Services Consumer Panel, Consumers in the Financial Market, 1999, figures add to 101% due to rounding. Note: Personal disposable income = personal income after taxes, at current prices

y, l s t n k e m t e s e e v n i W g This wealth growth, and affluent consumers tendency to invest, has fuelled rapid growth in the long term savings market e n i g 10 Upper quartile income households spend around 10% of wallet per week on financial services products* a v UK Long Term Savings APE 1995-1999, bn a 140 120 Financial Services Expenditure Share of Wallet by UK Income Deciles -16% -14% % s bn Life & Pensions Mutual Funds 11.3 CAGR 18.4% 100 80 60 40 The rising net worth segment -12% -10% - 8% - 6% - 4% 10 5 5.7 0.9 7.4 1.4 8.3 1.7 9.7 2.1 2.9 32.1% 20-2% 4.8 6.0 6.6 7.6 8.4 15.1% 0-0% 1 2 3 4 5 6 7 8 9 10 Income Deciles Weekly expenditure ( ) % of total expenditure 0 1995 1996 1997 1998 1999 Favourable economic and demographic conditions indicate these trends will continue *These figures exclude expenditure on home ownership Source: Family Expenditure Survey 98/99 Source: ABI, Statistical Bulletin, August 2000; Autif Note: Unit Trust APE estimated as (gross retail sales/10); probably an underestimate A. Defined as [(Total APE from ABI members) - (Collective investment APE from ABI members) + (Estimated retail unit trust APE)]

Despite ABC1 s making up over 75% of the long term savings market, no non-cash product has greater than 35% penetration in this segment 11 Annual value of product purchase by customer segment, 1999 % ABC1 s Holding Financial Investments by Type, 2000 Product % share of each segment 100% 80% 60% 40% Lump sum contribution to pensions Long term savings Protection General Insurance Regular contrib. to pensions Deposits % 40 35 30 25 20 15 10 20% Lump sum investment 5 0 0% AB C1 C2 DE % Value of segment 100% Tax Free Cash Tax Free Funds Direct Stocks Collective Investments Personal Pension Occupational Pension Source: Prospektus There remains scope for further considerable growth in the market as mass affluent customers invest in a broader range of products Source: Mintel, Personal Pensions, March 2000; Mintel, Collective Investments, August 2000

Consumers are using the wealth of information available to inform themselves before purchasing and are increasingly using the internet for this purpose 12 Awareness Learning & Understanding Detailed Evaluation Product Purchase Irrespective of method of purchase 75% of ABC1 customers carry out their own research Only 1 in 4 of UK ABC1 s use financial advisers Do my own research, make my own decisions 35% Do my own research, but seek advice before purchase 40% 24% Only ever seek professional advice 20% Use an adviser Of the 12m ABC1 internet users, 52% have researched a financial product online in the last 6 months A quarter of the online population purchased a financial product online. The most popular purchases include credit cards, savings accounts and stocks and shares Over half of ABC1 customers are comfortable in dealing with a company by phone, post or internet only 76% Combination of strong preference for self research, and under penetration of existing distribution channels, represents a significant opportunity for new self directed channel Source: NOP Omnibus May 2000 & CGEY analysis Forrester Research UK Internet Monitor November 2000 and MFS Jan - Sept 00 Source: TGI, BMRB 2000

Furthermore, underlying supply-side inefficiencies and regulatory trends are supporting the move to technology-based direct solutions 13 EU developing a new policy framework for regulation, in part because of the opportunity for cross-border activity driven by internet technology UK government seeking to move from regulating the process of sale to regulating product and pricing Supply-side action to withdraw traditional direct sales model in the UK accentuates supply side deficiencies and opportunity for new digital based distribution model

CGNU Wealth Management vision and long-term strategy 14 To build a top five UK wealth management e-business offering individuals integrated asset management, banking and protection products Create a new business model to act as the Group's bridge to the future utilising market leading technology and straight through business processing To attract and build profitable direct customer relationships for the Group reducing reliance on both the IFA channel and existing high cost direct distribution To progressively become the Group's retail e-distribution channel for direct long term customer relationships To develop skills, capability and learning that can be exported across CGNU

We are building a new, primarily digital wealth management business that positions us as your trusted wealth management partner helping you to make the most of your assets to maximise your wealth 15 Appeal to high value consumers with proposition based on simplicity, choice and trust Deliver an integrated personal financial management service, not a product push approach Capture and retain customers through a wide product range, virtual advisory support and strategic alliances Utilise the appeal of the Norwich Union brand Use strong cross sales techniques and sophisticated customer knowledge to drive profitability

- providing customers with a low cost, integrated and customised personal financial management service, enabling optimisation of personal assets and liabilities to maximise wealth on an anytime, anywhere basis 18 Target Customers High value 20-40k income ABC1 e-enabled Self Directed Customers Opinion Seeking Customers Channels Multi-channel Focus on digital Transitional requirement for clicks and mortar www idtv telephone Supported by customer contact centre finance centres Products Integrated product proposition Optimise assets and liabilities Price competitive Breadth of range Choice where a customer requirement Virtual Advisory Services Financial Planning Money Manager Education News Assets Share dealing Fund supermarket e-bank services Integration Liabilities Mortgage Loan Credit card Transfer Facility Protection

a rich customer experience and a wealth of ideas 19

Virtual Advisory Services - a competitive differentiator 20 A free, easy to use and comprehensive set of financial planning and money management tools, combined with a wide range of impartial information on financial products and options, plus up to date money news and fund/equity data Financial planning covers 5 key areas of Wealth Management: 1. Personal borrowing 2. Your Home 3. Savings and Investment 4. Planning for retirement 5. Protecting your wealth Structured into a series of engaging planning journeys that enable customers to progress at their own pace and in a way that is focused on their needs and preferences At any point in the journey customers can access the latest news, jargon busters, financial knowledge resources and financial calculators and tools

Virtual Advisory Services - the key to empowering the consumer 21

customer benefits 22 Low cost, integrated and personalised financial management from a trusted brand Pricing that takes account of assets and liabilities High degree of customer control and support 24 x 7 service Current net worth statement - single view of financial assets Financial products and services covering all long term needs

We will operate as a virtual business leveraging off the shelf packages, managed services, joint ventures and alliance capabilities 23 ecrm WWW DTV core competencies Home Page Marketing & www.site management Security Cheques and Post non-core competencies Banking Partner Compliance Call Centre Money Manager Financial Planner Products and Services Pershings Mellon Bank Legal Middleware - Transaction Engine Share dealing Banking S/M of Funds Investment Protection Mail/Image Cashiers email Mail CGNU central services infrastructure CGNU sourced

Substantial investment to build a robust, flexible and scalable business model for the future 24 Core IT systems and business processes built to high specification to provide scalable secure and robust long term capability Hub based systems architecture allows best of breed software for each component and enables plug and play of new digital distribution channels and product servicing engines Hardware components chosen to maximise flexibility, reliability and expandability Pathfinding new Group e-architecture systems and applications - building a bridge to the future Extensive testing period prior to launch to ensure customer quality

Phased Launch Strategy 25 2nd October 2000 Soft launch of demonstrator web site Spring 2001 Market Introduction of Virtual Advisory Services Summer 2001 Market Introduction of Fund Supermarket and Share dealing Autumn 2001 Market Introduction of First Phase Banking Products

Our competitive edge will come through 26 Unique positioning: - Norwich Union brand - Open architecture model - Virtual Advisory Services - Middle income mass market (circa 11m) Easy to understand customer value proposition centred on empowerment and strong product propositions Use of best of breed technology to provide a uniquely integrated and customised service giving a dynamic view of wealth on a 24 x 7 basis Significant investment in Customer Relationship Management technology to capture and develop new customers and fully exploit the scale of existing customer base Integration and alignment with core CGNU systems and infrastructure providing two way use of capability

CGNU set to be a winner with the mass affluent 27 Profiting from first movers learning Harnessing brand strength Embracing open architecture Deploying cutting edge technology Providing customer centric and integrated proposition Capitalising on core competencies Understanding: - It s good to be big - It s better to be good - It s best to be both