1. Rendez-Vous de Septembre Monte-Carlo 12 September, 2001 Patrick Snowball Executive Director, CGNU plc UK General Insurance Market

2. Agenda £ / € Conversion Rate 1.6 Motor General Liability Domestic Property Commercial Property Market Overview Discussion Introduction

3. UK GI Industry “Insurance Profit” Euro billion % of Written Premiums Source : Warburg Dillon Read “UK Insurance Prospects” (February 1999) - 1998 -2000

4. Motor Underwriting Results Motor Premiums 2000 € 12,257 million Source : ABI - Insurance Statistics Yearbook 1990-2000 % of Premiums Under writing Result (Euro million)

5. Motor - Discussion Points High proportion of motorists are not insured.High proportion of motorists are not insured. Growth in under 21s not insured. National training scheme in operation for new driversGrowth in under 21s not insured. National training scheme in operation for new drivers Increase in cost of bodily injury settlementsIncrease in cost of bodily injury settlements MIB levy £100m in 1995, forecast to be £260m in 2001MIB levy £100m in 1995, forecast to be £260m in 2001 Possible recessionPossible recession Rating action: Double digit rating increases in both 2000 and 2001Double digit rating increases in both 2000 and 2001

6. % of Premiums Under writing Result (Euro million) Domestic Property Premiums € 5,976 million Source : ABI - Insurance Statistics Yearbook 1990-2000 Domestic Property U/W Results

7. Domestic Property - Discussion Points High proportion of buildings and contents not insuredHigh proportion of buildings and contents not insured Global climate change - more extreme weather events:Global climate change - more extreme weather events: –Floods; coastal and inland –Storms –Subsidence Flood strategy; defense and house building policiesFlood strategy; defense and house building policies Possible recessionPossible recession Rating action: Modest rating increases in 2000, expect to see this rising further in 2001Modest rating increases in 2000, expect to see this rising further in 2001

8. Commercial Property U/W Results % of Premiums Under writing Result (Euro million) Commercial Property Premiums € 3,456 million Source : ABI - Insurance Statistics Yearbook 1990-2000

9. Commercial Property - Discussion Points Global climate change - more extreme weather conditionsGlobal climate change - more extreme weather conditions Possible recessionPossible recession TerrorismTerrorism Rating action: Some rating increases in 2000, expect to see this rising further in 2001Some rating increases in 2000, expect to see this rising further in 2001

10. General Liability Underwriting Results % of Premiums Under writing Result (Euro million) General Liability Premiums 2000 € 2,040 million Source : ABI - Insurance Statistics Yearbook 1990-2000

11. General Liability - Discussion Points Increase in cost of bodily injury settlementsIncrease in cost of bodily injury settlements Latent claims - social and environmentalLatent claims - social and environmental Compensation cultureCompensation culture Rise of no win no feeRise of no win no fee Cyber risks e.g. copyright, viruses. First and third party risksCyber risks e.g. copyright, viruses. First and third party risks Foot and mouth - what are the consequences?Foot and mouth - what are the consequences? Market capacityMarket capacity Rating action: Double digit rating increases in both 2000 and 2001Double digit rating increases in both 2000 and 2001

12. Market Overview - Discussion Points Significant rate increases in both 2000 and 2001Significant rate increases in both 2000 and 2001 Key market trends:Key market trends: –Compensation culture and increasing cost of settlements –Global climate change –Level of car drivers and households without insurance –Self regulation and FSA Market results are net of R/I - how can we work together to remove this volatility?Market results are net of R/I - how can we work together to remove this volatility? Chester Street/Independent - how can we protect the consumer?Chester Street/Independent - how can we protect the consumer? Insurers have a duty to shape the futureInsurers have a duty to shape the future

13. Rendez-Vous de Septembre Monte-Carlo 12 September, 2001 Patrick Snowball Executive Director, CGNU plc UK General Insurance Market

14. Appendix UK GI premium income by class of business UK GI underwriting results by class of business

15. UK General Business Premium Income By Class of Business NWP - Net Written Premiums Source : ABI Insurance Statistics Yearbook 1989-1999 1999 Motor 1997 1998 Domestic Property Commercial Property General Liability NWP 9,747 6,674 3,376 2,488 3,139 10,419 7,026 3,382 2,558 3,443 NWP € million Pecuniary Loss Accident and Health4,198 4,590 Marine, A & T 787 816 Total30,40932,234 11,270 6,219 3,504 2,085 3,837 4,826 626 32,367 2000 NWP 12,257 5,976 3,456 2,040 3,988 4,651 658 33,026

16. Underwriting Results by Class of Business Motor 199719981999 Domestic Property Commercial Property Pecuniary Loss General Liability € million (1,861) (146) - 534 (342) (2,096) (334) (325) 464 (379) Source : ABI - Insurance Statistics Yearbook 1989-1999 Marine, A & T (40) (38) Accident and Health 146 (118) Total (1,709)(2,826) (2,366) (458) (91) 347 (658) (66) (43) (3,335) 2000 (1,448) (704) (1,042) 394 (598) (62) 46 (3,414) € million