Earnings per share and Embedded Value

Investment markets performed well during the quarter and the groups BEE normalised headline earnings per share and BEE normalised embedded value per share strengthened as a result.  The weighted average gross investment return (a proxy for the shareholders participation in investment returns on assets backing certain classes of policyholder business) was 22.7% for the first nine months of 2006.  This was ahead of the actuarial assumptions, but below the 25.7% experienced for the first nine months of 2005.  The groups BEE normalised embedded value per share increased by between 3%-5% during the quarter after adjusting for the payment of the interim dividend of R1.40 per share.

Indexed new business

Indexed new business life premiums for the quarter were 4% lower than the same period last year.  Indexed retail life new business premiums were also 4% lower for the 9 months ended 30 September 2006.  Indexed corporate premiums were 6% lower for the 9 months ended 30 September 2006 mainly as a result of the receipt of large single premiums in the comparative period in 2005.  Due to a number of factors, including the completion of the distribution restructuring exercise, new business retail volumes since the end of September 2006, have shown a return to positive growth.

Life net cash flows continue to be positive albeit at levels lower than 2005.  New business margins are currently slightly below those recorded in the interim results.

Costs

The continued focus on cost control has resulted in recurring management expenses being below 2005 levels.  The groups integration and restructuring continues as expected and management remains committed to the projected R300m annualised cost saving targets.

Audit/ Review

None of the figures have been audited or reviewed by the groups auditors.