Variable Annuities A Secular Growth Story in US Life Insurance Suneet Kamath Senior Analyst – Life Insurance suneet.kamath@bernstein.com +1-212-756-4587 Please see disclosure appendix for important disclosures and analyst certifications

What Investors Say about Life Insurance I don’t understand the products. I don’t understand how companies make money. The return on investment in learning about the group is low. I don’t have to own these stocks. ©Bernstein Research, 2008

In Terms of Understanding Annuities, Help is On the Way ©Bernstein Research, 2008

Why Investors Don’t Have to Own Life Insurance Stocks Market Capitalization of Financial Sectors as a % of S&P 500 Source: FactSet ©Bernstein Research, 2008

Life Stocks Tend to Perform Well Relative to the Market Life Insurance – Median Stock Price Performance Relative to the S&P 500 Source: FactSet Note: List of companies is available upon request ©Bernstein Research, 2008

ROE Drives Life Insurance Valuation Life Insurance – Projected ROE vs. P/B Source: Company Reports, FactSet and Bernstein estimates ©Bernstein Research, 2008

Life Insurers’ ROEs Are Stable Financial Services – ROE Comparison Source: Company Reports, FactSet and Bernstein estimates Note: List of companies is available upon request ©Bernstein Research, 2008

What Life Insurance Has to Offer to Investors Large and Established In Force Blocks Drive Bulk of Current Period Revenues and Earnings Exposure to “Catastrophic” Events is Low Versus Other Financials (e.g., Weather Related Events or Volatile Capital Markets) Demographics Provide Favorable Backdrop Stability in ROEs and Book Value Growth ©Bernstein Research, 2008

It’s Generally Working Today Financial Services – 2007 and 2008 YTD (Through 3/31/08) Median Relative Stock Price Performance Source: FactSet Note: List of companies is available upon request ©Bernstein Research, 2008

Agenda for Discussion on Variable Annuities Past – Historical Trends in Variable Annuities Present – The Era of Guaranteed Living Benefits Future – Competition in the Global Retirement Market ©Bernstein Research, 2008

Variable Annuities – Driver of Growth and Profitability Product Sales Growth Source: NAVA, LIMRA International and Bernstein estimates Estimated ROE Targets by Product Source: Tillinghast ©Bernstein Research, 2008

But What is Driving Growth and ROEs? VA – Components of Annual Growth in AUM Source: NAVA and Bernstein estimates VA – Annual Average Growth in AUM vs. Net Flows, 2000-06 Source: NAVA and Bernstein estimates ©Bernstein Research, 2008

Prior Products Provide Questionable Value to Consumers Traditional VA vs. Mutual Fund Comparison – IRR to Consumer Source: NAVA and Bernstein estimates AB SubAdvisory Services Group Survey – “Are You Interested in Training On:” Source: AllianceBernstein, L.P. Scenario 1 – 8% Market Return Scenario 2 – Y1: -10%, Y2: -5%, Y3: 0%, 8% Thereafter Scenario 3 – 2000-06 Actual Return, 8% Thereafter ©Bernstein Research, 2008

Present – SCB View of Guaranteed Living Benefits (GLBs) GLBs Have Increased Value Proposition to Consumer Provides Insurance Based Solution to Mitigate Longevity Risk Academic Research Suggests Costs More Aligned with Consumers 3rd Party Distribution Sees Need for GLB Income for Life Solution GLBs Should Improve Underlying Economics of the VA Guarantees Should Improve Customer Persistency Persistency Improvement Should Lead to Operating Efficiencies Risk Management Remains an Issue, but Life Insurers are Being More Disciplined in Mitigating Risk Expect Companies will Improve Product Design and Risk Mitigation in the Future ©Bernstein Research, 2008

Evidence that GLBs Becoming a Dominant Part of the Sales Pitch VA – Percent of VA Sales that Included a GLB, 1H:07 Source: Corporate reports and Bernstein estimates VA – Percent of VA AUM that Included a GLB, 2Q:07 Source: Corporate reports and Bernstein estimates ©Bernstein Research, 2008

Evidence that 3rd Party Distribution Sees Value in GLBs AB SubAdvisory Services Group Survey – "Are You Interested in Training On…“ Source: AllianceBernstein, L.P. AB SubAdvisory Services Group Survey – "How Interested Would You Be in a Product that Could Offer Your Clients Guaranteed Income in Retirement with the Potential for Market Appreciation After Your Clients are Already Retired?“ Source: AllianceBernstein, L.P. ©Bernstein Research, 2008

Evidence that GLBs Improve Persistency VA Surrender Rates Based on Election of GLBs Source: LIMRA International VA Surrender Rates Based on Election and Availability of GMWB Rider Source: LIMRA International ©Bernstein Research, 2008

Expenses to Decline as Sales and Persistency Improve Sales Benefits in Asset Gathering Segments Source: Corporate reports and Bernstein estimates ©Bernstein Research, 2008

Evidence of Risk Mitigation Across Many Fronts Life Insurance – Various Risk Mitigation Strategies at Work Source: Corporate reports and Bernstein estimates Thought I’d start with a typical investor meeting that I could have on a daily basis. Here we have a gentleman who represents a typical Portfolio Manager that I might meet. Next to him, we have a series of comments that I tend to hear when I speak to investors about taking positions either long or short in US life insurance. Go through each one. ©Bernstein Research, 2008

Future – Long-Term Benefits of GLBs GLBs Should Help the Life Sector Gain Share of Retirement Assets Potential Shift in Balance of Power from Asset Management to Life Insurance as Guarantees, not Investment Performance, Become the Primary Selling Point of VAs VA’s Low “Relative ROEs” Form a Barrier to Entry for Other Financials $7 Trillion Long-Term Opportunity in the US Alone Life Insurers Can Leverage Expertise Internationally Unstoppable Favorable Demographic Trends Exist Across the Globe Anecdotal Evidence that Life Insurers Using International Growth Opportunity to Negotiate Lower Sub-Advisory Payments to Asset Managers ©Bernstein Research, 2008

Optimistic that GLBs Have a Tremendous Growth Opportunity Conclusions Optimistic that GLBs Have a Tremendous Growth Opportunity Value Proposition of VAs has Improved Independent Advisors See the Need for Solutions that GLBs Provide $7 Trillion Opportunity in the US Alone Product and Risk Mitigation Strategies Still Being Tested But Companies More Disciplined Today vs. the Past Current Experience Will be Utilized to Improve Risk Management Life Insurance Could Gain Share of Global Retirement Market Export GLB Expertise to Markets with Attractive Demographics Leverage Global AUM Growth Opportunity to Lower Asset Management Fees ©Bernstein Research, 2008

With Any Luck, Annuity Buyers & Investor Will See the Light ©Bernstein Research, 2008

Disclosure Appendix SRO REQUIRED DISCLOSURES • References to "Bernstein" relate to Sanford C. Bernstein & Co., LLC and Sanford C. Bernstein Limited, collectively. • Bernstein analysts are compensated based on aggregate contributions to the research franchise as measured by account penetration, productivity and proactivity of investment ideas. No analysts are compensated based on performance in, or contributions to, generating investment banking revenues. • Bernstein rates stocks based on forecasts of relative performance for the next 6-12 months versus the S&P 500 for U.S. listed stocks and versus the MSCI Pan Europe Index for stocks listed on the European exchanges - unless otherwise specified. We have three categories of ratings: Outperform: Stock will outpace the market index by more than 15 pp in the year ahead. Market-Perform: Stock will perform in line with the market index to within +/-15 pp in the year ahead. Underperform: Stock will trail the performance of the market index by more than 15 pp in the year ahead. • As of 01/14/2008, Bernstein's ratings were distributed as follows: Outperform/Buy - 46.8%; Market-Perform/Hold - 46.5%; Underperform/Sell - 6.8%. • Accounts over which Bernstein and/or their affiliates exercise investment discretion own more than 1% of the outstanding common stock of the following companies GNW / Genworth Financial Inc, MET / MetLife, PRU / Prudential Financial. • The following companies are or during the past twelve (12) months were clients of Bernstein, which provided non-investment banking-securities related services and received compensation for such services AMP / Ameriprise Financial Inc, LNC / Lincoln National, MET / MetLife, NFS / Nationwide Financial, PRU / Prudential Financial. • An affiliate of Bernstein received compensation for non-investment banking-securities related services from the following companies AMP / Ameriprise Financial Inc, MET / MetLife, NFS / Nationwide Financial, PRU / Prudential Financial. • This research report covers six or more companies. For price chart disclosures, please visit www.bernsteinresearch.com, you can also write to either: Sanford C. Bernstein & Co. LLC, Director of Compliance, 1345 Avenue of the Americas, New York, N.Y. 10105 or Sanford C. Bernstein Limited, Director of Compliance, Devonshire House, One Mayfair Place, London W1J 8SB, United Kingdom. ©Bernstein Research, 2008

Disclosure Appendix 12-Month Rating History as of 2/28/2008 ========================================== AFL: Initiated Coverage: O - 7/15/2004; AMP: Initiated Coverage: O - 10/20/2006; GNW: Initiated Coverage: M - 10/20/2006; LNC: Initiated Coverage: M - 4/19/2002; MET: Initiated Coverage: O - 4/19/2002; Rating History: O - 1/15/2008;NFS: Initiated Coverage: O - 4/19/2002; Rating History: M - 1/18/2006;PFG: Initiated Coverage: O - 4/19/2002; Rating History: O - 7/10/2007;PRU: Initiated Coverage: M - 4/19/2002; Rating History: O - 10/9/2003; OTHER DISCLOSURES To our readers in the United States: Sanford C. Bernstein & Co., LLC is distributing this report in the United States and accepts responsibility for its contents. Any U.S. person receiving this report and wishing to effect securities transactions in any security discussed herein should do so only through Sanford C. Bernstein & Co., LLC. To our readers in the United Kingdom: This report has been issued or approved for issue in the United Kingdom by Sanford C. Bernstein Limited, authorized and regulated by the Financial Services Authority and located at Devonshire House, 1 Mayfair Place, London W1J 8SB, +44 (0)20-7170-5000. To our readers in member states of the EEA: This report is being distributed in the EEA by Sanford C. Bernstein Limited, which is authorized and regulated in the United Kingdom by the Financial Services Authority and holds a passport under the Investment Services Directive. To our readers in Australia: Sanford C. Bernstein & Co., LLC and Sanford C. Bernstein Limited are exempt from the requirement to hold an Australian financial services license under the Corporations Act 2001 in respect of the provision of the following financial services to wholesale clients: • providing financial product advice; • dealing in a financial product; • making a market for a financial product; and • providing a custodial or depository service. Sanford C. Bernstein & Co., LLC and Sanford C. Bernstein Limited are regulated by the Securities and Exchange Commission under US laws and by the Financial Services Authority under UK laws, respectively, which differ from Australian laws. One or more of the officers, directors, or employees of Sanford C. Bernstein & Co., LLC, Sanford C. Bernstein Limited and/or its affiliates may at any time hold, increase or decrease positions in securities of any company mentioned herein. Sanford C. Bernstein & Co., LLC, Sanford C. Bernstein Limited, or its or their affiliates may provide investment management or other services to the pension or profit sharing plans, or employees of any company mentioned herein , and may give advice to others as to investments in such companies. These entities may effect transactions that are similar to or different from those recommended herein. ©Bernstein Research, 2008

Disclosure Appendix CERTIFICATIONS • I/(we), Suneet Kamath, CFA, Senior Analyst(s), certify that all of the views expressed in this report accurately reflect my/(our) personal views about any and all of the subject securities or issuers and that no part of my/(our) compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views in this report. Copyright 2008, Sanford C. Bernstein & Co., LLC, a subsidiary of AllianceBernstein L.P. ~ 1345 Avenue of the Americas ~ NY, NY 10105 ~ 212/756-4400. All rights reserved. This publication is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of, or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Bernstein or any of their subsidiaries or affiliates to any registration or licensing requirement within such jurisdiction. This publication is based upon public sources we believe to be reliable, but no representation is made by us that the publication is accurate or complete. We do not undertake to advise you of any change in the reported information or in the opinions herein. This publication was prepared and issued by Bernstein for distribution to eligible counterparties or professional clients. This publication is not an offer to buy or sell any security, and it does not constitute investment, legal or tax advice. The investments referred to herein may not be suitable for you. Investors must make their own investment decisions in consultation with their professional advisors in light of their specific circumstances. The value of investments may fluctuate, and investments that are denominated in foreign currencies may fluctuate in value as a result of exposure to exchange rate movements. Information about past performance of an investment is not necessarily a guide to, indicator of, or assurance of, future performance. ©Bernstein Research, 2008

Disclosure Appendix Provided courtesy of Pruco Life Insurance Company (in New York, Pruco Life Insurance Company of New Jersey) both located in Newark, NJ, or by Prudential Annuities Life Assurance Corporation, Shelton, CT, as well as Prudential Annuities Distributors, Inc., Shelton, CT. All are Prudential Financial companies. The views expressed are those of BernsteinResearch, AllianceBerstein L.P. They are subject to change at any time. These views do not necessarily reflect the view of the Prudential Financial companies. BernsteinResearch, AllianceBerstein L.P. is not affiliated with any of the Prudential Financial companies.   For Financial Professional Use Only / Not For Use With The Public IFS-A146480 Ed. 04/2008 ©Bernstein Research, 2008