Lloyd’s – Profile & Reality May 2005

Lloyd's has put much effort into improving its public profile. The effect has been a much-needed upgrading of external perceptions, which has undoubtedly encouraged business to flow to Lloyd's. But does the profile match the reality? The discussion that follows considers key recent developments to enable Willis' clients to understand the current status in a balanced perspective.

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Contents – Section 1: Underwriting Direction ..........................................................................................................2 – The Impact and Implications of the Director of Franchise Performance – The Implied Strategy – The Value of a Central Review Process – Section 2: Repositioning – The Market Adjusts ....................................................................................4 – Major Players Develop Options Outside – Motor Finds a Cheaper Home – A New Life for the Private Name? – Central Adjustment at Lloyd's – Enterprise Culture? – Section 3: Profit & Loss – A Stronger Platform for the Future ..........................................................7 – The Ten-Year View and a Peer Comparison – Diminished Damage from the Bottom Quartile – Strengthened Balance Sheet – Strengthened Central Resources – Section 4: Security – Lloyd's Adjusts ....................................................................................................11 – RBC's Rise as Market Falls – Central Fund Strengthens – Section 5: Equitas ....................................................................................................................................15 – Asbestos, Asbestos – Is a Future Call a Possibility? – Is a Past Call a Possibility? – Section 6: Costs & Compliance ..............................................................................................................16 Contact Us: For more information please contact your Client Advocate.

– Section 7: The External View..................................................................................................................18 – The London Stock Market's View – Standard and Poor's View – Section 8: Licences & Branding..............................................................................................................23

For general enquiries, contact Helen Davis Tel: +44 (0)20 7488 8077 Email: [email protected]

– Section 9: Summary ................................................................................................................................24 – Appendix ..................................................................................................................................................25 Willis Lloyd’s – Profile & Reality May 2005 1

1 The Impact and Implications of the Director of Franchise Performance Lloyd's has undoubtedly made a bold and important appointment in giving Mr Rolf Tolle his present role as Franchise Performance Director. The recent efforts made to manage the overall market capacity centrally have enjoyed very sound press reporting. Market observers have been impressed with Mr Tolle's evidently firm leadership in his role. A natural question follows. Historically, Lloyd's behaviour patterns have been heavily influenced by an older generation of underwriters who found it difficult to adapt, notably in the later 1980's and early 1990's. Has Mr Tolle succeeded in bringing this mentality to a new outlook? The answer appears to be mixed but favourable. It would be surprising if there were no frustrations at the imposition of disciplines such as Mr Tolle's requirement for central approval of business plans. However he appears to have won the great majority around to the recognition that the market has too often suffered from the complete absence of central discipline of this kind. The overall achievement of shaping the global market capacity is undoubtedly impressive. Lloyd's opening capacity for 2005 is £13.72 billion, down 9% on 2004 opening capacity of £15.00 billion. Lloyd's states that this, together with the 10% decrease in gross written premium to £14.71 billion, is indicative of the market's discipline in underwriting for profit.

Underwriting Direction

There are several factors influencing this change. In one important respect, the impression given by this creditable performance needs to be tempered by wider realities. This arises in the context that a significant number of major businesses at Lloyd's have (or have created) parallel corporate vehicles into which they can channel business that previously was written at Lloyd's. These include Ace, Berkshire Hathaway, Brit, Catlin, Hiscox, XL Capital, and a further example has been the flotation of Aspen Re out of the Wellington Group. In the bigger picture, what is certainly happening is that blocks of business are moving out of (and perhaps into) Lloyd's. The overall volumes involved would very possibly tell a different story than that told by the elements that from 2004 into 2005 remain continuously at Lloyd's. Accordingly the "controlled market" external appearance could be recast to adjust for the rising transfers of business to non-Lloyd's vehicles. Thus in the more complex totality, Lloyd's could be seen as in some respects still growing into a falling market.

Willis Lloyd’s – Profile & Reality May 2005 2

1 The Implied Strategy Lloyd's obviously cannot seek to control what is written outside its franchise. On the contrary, it would appear that the Franchise Board is not unsupportive of Lloyd's businesses developing alternative platforms that are more suited to carrying certain types of business. The key focus is evidently upon the protection of the core Franchise capabilities and, with them, the Central Fund. In the case of the Motor and some Personal Lines insurance products, there is something of an implication that Lloyd's is content to see these leave the market. To be fair, there is some natural rationale for this, in that from the FSA's perspective one can easily see that this arena is already well managed in the UK within the existing nonLloyd's regulatory framework. But there is also a downside to this approach. We discuss some of the strategic disadvantages from the Lloyd's perspective on pages 4-6.

Underwriting Direction

The Value of a Central Review Process Overall, the good news remains that the business that is being written at Lloyd's remains subject to more careful review processes than at the comparable stage of any earlier cycle; and the underwriters writing that business are in general operating within more carefully crafted frameworks than previously evident. There may not be so much of the old "flair and entrepreneurship" that characterised earlier eras, but one has grounds to hope that the greater current disciplines should deliver a better-managed down-cycle.

Willis Lloyd’s – Profile & Reality May 2005 3

2

Repositioning – The Market Adjusts

Major Players Develop Options Outside The trend to reposition has continued. Mention has been made of some businesses channelling capacity through corporate insurance vehicles. There has been a notable trend to cut back at Lloyd's from some significant participants. Why is this happening? Cost, distributional flexibility and perhaps regulatory flexibility seem to be the key drivers. Lloyd's has added a substantial expense overhead which these entities have found acceptable in the past but which is increasingly perceived as standing between management and a satisfactory return for shareholders. The good news here has been the major steps taken centrally to reduce this burden from 2005 onwards. We discuss this specifically on pages 16-17. There are obvious attractions to the flexibility of a multi-platform strategy, although these vary in relevance to specific businesses. The diversity of distribution options has a natural appeal for many. There is the reality that certain types of business may be perceived to work more effectively through non-Lloyd's vehicles: for some businesses there is an obvious attraction to channelling their Personal Lines and other simpler business towards their non-Lloyd's platforms. This is partly driven by the prospect of a cheaper cost base, and partly in some marginal cases that there may be only limited pressure to provide security that is as good as that of Lloyd's as a whole. There is also an element of businesses preferring to govern themselves, rather than live with being

accountable to the Lloyd's Franchise Performance Board. We look at "double-decker" compliance on pages 16-17. The overall picture is undoubtedly one of active management and material change. It makes for a huge contrast with the Lloyd's of ten and twenty years ago. Motor finds a cheaper home The Admiral Syndicate and the substance of the Service Syndicate are two leading examples of the trend to transfer motor business out of Lloyd's; but there are others who have found irresistible attractions in the cheaper costs and lower capital requirements that are available outside the Lloyd's framework – some of them in Gibraltar. Lloyd's might count itself fortunate that the core that remain continue to do so. Over the years there have been a number of representations to propose a differential contribution to the Central Fund from Motor Syndicates, who clearly have represented a lower risk to the Fund both as exposure and as experience. It could still be a positive and progressive step if Lloyd's were to reconsider this issue; the Risk Based Capital approach may not deliver an attractive environment for a long time. See the discussion on pages 2-3 and further below on pages 11-14.

Willis Lloyd’s – Profile & Reality May 2005 4

2

18,000

16.0%

16,000

14.0%

14,000

12.0%

12,000

10.0%

10,000 8.0% 8,000 6.0%

6,000

4.0%

4,000

A New Life for the Private Name? In the other direction, there is an independent Members' Agents initiative to attract new private names to the market. Will this work? Good results might appear to make it an attractive proposition, but there is undoubtedly a legacy of concern. It remains to be seen whether there is real scope to regenerate capacity in this way. It should be noted that the number of active private names has continued to fall even as the peak-of-the-cycle years of 2003 and 2004 move towards maturity and preliminary result estimation.

2.0%

2,000 0

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 (e) (e) All other classes

UK Motor

0.0%

Motor capacity

Willis Lloyd’s – Profile & Reality May 2005 5

Percenatge of Market Capacity

Viewed centrally, it might be attractive in some respects to Lloyd's to try to maintain this element of its franchise – the central costs become more widely distributed, which of course is a key issue for the future, and the open appeal of the market as an "address for all comers" has an undeniable value. But one can see that from the FSA's perspective there might be good sense in Lloyd's becoming concentrated as a centre of excellence for specialist insurance and reinsurance business; equally one has the anecdotal impression that there is limited demand from capital providers at Lloyd's for there to be any change to this general direction.

Capacity (£ million)

Repositioning – The Market Adjusts

2

Repositioning – The Market Adjusts

Central Adjustment at Lloyd's Lloyd's, of its own accord, is working hard to reposition itself, both in terms of its profile, its branding and in many very important technical ways. Under this last heading the concentrated efforts to deliver contract certainty are long overdue across the market, and it is immensely good to see this initiative taking wing. Other drives for business reform, overseen by the newly appointed Steve Quiddington at Lloyd's, should develop efficiencies in electronic claims files, accounting and settlements. We discuss branding on page 23. Enterprise Culture ? With these issues in mind, it is perhaps worth remembering where some of the major successes at Lloyd's have originated. It would be invidious to single out individual names, but time and again one can look back into the history books of the better enterprises and remark upon how often these now-great businesses originally set out with tiny stamp capacities and fragile support. Some of these now-highly-regarded names spent literally decades as disfavoured entities, and occasionally even as market pariahs.

Given the track record of many of the new starts over the past two decades, this is understandable, but it must be a matter for real debate as to whether the newly-repositioned central Franchise Management approach is going to provide an environment in which these sometimes fragile entities can come to life. This of course is not atypical of a theme which arises increasingly often in many spheres of economic activity – it is a generality of our age that smaller-scale forms of innovation are finding it harder to take root. The scale required for new reinsurer start-ups outside Lloyd's has multiplied perhaps tenfold in the past fifteen years; it may well be appropriate that a comparable reality is developing within the Lloyd's market.

This is not to say that new entities have not started in recent years, but the issue of "small start-ups" is a challenging one, not least because buyers and their brokers may to some degree prefer to work with smaller entities provided the security is appropriate. It seems that a higher hurdle is being set than in earlier times.

Willis Lloyd’s – Profile & Reality May 2005 6

3

Profit & Loss – A Stronger Platform for the Future

Lloyd's has taken care to highlight the way that its recent combined ratio compares favourably with its competitor peer groups. This gives a very encouraging perspective.

Year

Lloyd’s Combined Ratio Versus Industry

2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 Total:

Financial Results/Projections Annually Accounted Three Year Basis Accounted £1,357 million £1,074 million (p) £1,892 million £2,069 million (p) £834 million £1,193 million (£3,110) million (£2,378) million (£1,211) million (£2,397) million (£1,952) million (£1,065) million (£209) million £606 million £1,149 million £1,095 million £225 million (£590) million (p)

Result (Three Year Basis) as % Capacity 7% (p) 14% (p) 9% (21%) (24%) (20%) (10%) (2%) 6% 11% 10% 3% (0.4%) (p)

Note: Under annual accounts the whole of the loss for September 11 falls into 2001, whilst under three year accounting it is split between 2001, 2000 and 1999. (p) = projection

Combined Ratio

The Long Term View and a Peer Comparison The table below sets out Financial Results (projections for the open 2003 and 2004 "three-year accounting" results) for the Lloyd's Market as a whole.

130% 120% 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10%

On the above basis, one might feel concern at the market's achievements over a longer time span. However, for the first time in its history there is a genuine and concerted central effort to avoid the debilitating losses that have marred the market's down-cyclical performance. This merits closer examination.

0

Lloyd's 2002

US P/C Industry 2003

US (Re)insurers

European (Re)insurers

Bermuda (Re)insurers

2004

Source: Lloyd's

Willis Lloyd’s – Profile & Reality May 2005 7

3

Profit & Loss – A Stronger Platform for the Future

Diminished Damage from the Bottom Quartile? The divergence of syndicate performance is again marked in the 2002 year of account result. However, based on the 2003 forecast results, this divergence amongst syndicates appears to have narrowed – it has to be expected at any point in the cycle that

Quartlie Performance – 2002 Year Result

Quartlie Performance – 2003 year Forecast Results as of Quarter 8

Percentage of Capacity

Percentage of Capacity

there will be underperformers. It remains to be seen whether the Franchise Performance approach will have real impact, but the early signals are encouraging.

30%

20%

30%

20%

10%

10%

0

0

-10%

-10%

-20%

-20%

-30%

1st Quartile

2nd Quartile

3rd Quartile

4th Quartile

Quartile by number of syndicates

-30%

1st Quartile

2nd Quartile

3rd Quartile

4th Quartile

Quartile by number of syndicates

Willis Lloyd’s – Profile & Reality May 2005 8

3

Profit & Loss – A Stronger Platform for the Future

Strengthened Balance Sheet Lloyd's profits in recent years have contributed to a strengthening of its collective balance sheet. Net resources of the Society and Lloyd's members increased by 20% to £12,169m (2003: £10,145 million). £m Cash & investments Reinsurers' share of technical provisions Other assets Total assets Total liabilities Net resources Balance due to/(from) members Funds at Lloyd's Central assets

2002 24,512 13,693 11,091 49,296 41,787 7,509 (2,022) 8,968 7,509

2003 27,893 11,180 9,830 48,903 38,758 10,145 (295) 9,659 10,145

2004 31,362 9,876 9,010 50,248 38,079 12,169 1,363 9,622 12,169

One solid step towards improved performance is observable in the reducing dependency upon reinsurance, both in balance sheet terms for past losses and in exposure terms for current risk management. At the balance sheet level, Lloyd's reinsurers' share of technical provisions decreased to £9,876 million (2003: £11,180 million) to represent 81% (2003: 110%) of net resources.

the market to underwrite for a gross profit has contributed towards the decline in Lloyd's reinsurance spend. Also contributing towards this declining trend will be managing agents' desire to retain more good business at this point in the underwriting cycle. At 19.8% of gross written premiums, Lloyd's reinsurance spend is the lowest for a decade. Lloyd’s Reinsurance Spend as % Gross Written Premiums 35% 30% 25% 20% 15% 10% 5%

The Franchise Board's encouragement – including reducing the permitted levels on qualifying quota share (QQS) reinsurance – to

0

2002

2003

2004

Willis Lloyd’s – Profile & Reality May 2005 9

3

Profit & Loss – A Stronger Platform for the Future

Strengthened Central Resources Lloyd's decision to increase the level of long-term central assets resulted in the announcement of two initiatives in 2004. One of these was a genuine innovation; the second was perhaps more designed as a cost management issue. Firstly, the Society successfully raised approximately £500 million of subordinated debt, thereby helping to increase central assets to £1,184 million in 2004, up from £781 million. This is discussed in more detail below. The second element, which commenced in 2005, was the reduction of the Central Fund Levy from 1.25% to 0.5%, accompanied by the introduction of syndicate loans from syndicates' Premium Trust Funds. Syndicate loans are currently charged at 0.75% of the syndicate's capacity each year. The loans will be repaid to syndicate members after three years, assuming Lloyd's has not been required to use this capital. Central assets were supplemented by £102 million of syndicate loans in 2005, but this should be considered against the background that income from the premium levy on members ceased in 2004 as a source of capital for Lloyd's centrally. This gives the good outcome that the Market's central assets are being strengthened whilst minimizing the impact on syndicate returns.

Willis Lloyd’s – Profile & Reality May 2005 10

4

Security – Lloyd’s Adjusts

RBC's rise as Market falls One of the first questions asked by students of solvency theory is "Why is Solvency measured in terms of Premium?". Solvency naturally should be measured as a function of liabilities, not income. It is only the long-standing inability of practitioners to reach a more accurate alternative that has left premium as a pragmatic substitute measure. It is therefore all the more striking and impressive that the Finance arm of Lloyd's has implemented a regime since 2002 that has gradually adapted their Risk Based Capital ("RBC") model. The impact has consistently raised the market's capital requirements in a manner that with hindsight might be viewed as contracyclical. As the market rose to a peak, solvency requirements were materially lower than they are today. In addition, surplus facilities such as the Qualifying Quota Share scheme were created. These were extensively used at the peak of the cycle; regulators at Lloyd's have acted to phase them out since then.

Willis Lloyd’s – Profile & Reality May 2005 11

4 It is not clear whether the following table emanates from an active objective to manage the market's behaviour with a contracyclical RBC requirement pattern, or whether it derives from a need to position Lloyd's at a capital adequacy level which would at least match that previously evolved under the auspices of the FSA for comparable corporate insurers in the UK. Whatever the reason, it is an impressive pattern, and is likely to be an active contributor to improved prospects for the Lloyd's market. Year 2002 2003 2004 2005

RBC Ratio (% of Stamp Capacity) 44.3% 46.4% 50.7% 55.2%

The effect of this pattern is that as pricing pressures mount, the use of capital is simultaneously being made a more serious issue for underwriting management teams. This in turn acts to raise underwriting discipline at precisely the cyclical point where it is most needed. It may well prove to be a key factor in the minimizing of poor results in any coming down-cycle.

Security – Lloyd’s Adjusts

In Detail … For several years, the capital each Member has had to deposit in trust as capital to support its underwriting (Funds at Lloyd's, or FAL), has been calculated using a risk-based capital (RBC) approach, depending on each syndicate's business mix and track record. RBC is determined at individual Member level, depending on the business mix of the individual Member's individual syndicate(s), and can vary from a market minimum of 40% of the syndicate's stamp capacity for a low volatility syndicate, to well in excess of 100% for a property catastrophe specialist. The principal aim of the RBC system has been to equalise the expected loss to the Central Fund, per unit of premium accepted by each Member. It is currently determined as a percentage of the Member's capacity, stated net of acquisition costs, although this is expected to change within the next two years as part of a range of significant modifications that are planned to reflect the FSA's new approach to setting regulatory capital. The RBC regime was amended in 2003, and this has had the effect of increasing FAL by approximately 25% between 2002 and 2005; the average RBC scores across the whole market, measured as a percentage of Stamp Capacity, have increased as shown in the table opposite.

Willis Lloyd’s – Profile & Reality May 2005 12

4 Central Fund Strengthens The New Central Fund was established to be available – at the discretion of the Council of Lloyd's – to meet policyholders' claims in the event of members being unable to meet their underwriting liabilities relating to 1993 and later non-life business, and all life business. It therefore forms the last line of security once an individual Member's Funds at Lloyd's have been exhausted. The fund is increased annually by means of a levy on each underwriting Member – currently 0.5% of capacity for continuing Members, and 2.5% of capacity for new Members. From 2005 Underwriting Year, Members are now obliged to lend 0.75% of capacity (interest bearing) from their Premiums Trust Fund on a three year rolling basis; at the end of each three year cycle, this loan will be returned to the Member provided it has not been impacted. Additionally the Council has the authority to levy a "callable layer" of up to 3% of capacity in any year.

Security – Lloyd’s Adjusts

Syndicate Loan Repayment Structure Syndicate

Lloyd's Central Fund

Funding is from syndicate premium working capital progressive build up 2005-2008 Syndicate X Capacity £m 2005

0.75% Interest

Syndicate X Capacity £m 2006

0.75%*

Syndicate X Capacity £m 2007

0.75%*

Syndicate X Capacity £m 2008

0.75%*

Interest

Repayment of 2005 loan

Loan Layer invested in a low-risk largely Fixed Income Portfolio

Interest

Interest

*Based on current assumptions, reviewed annually Source: Lloyd's

Willis Lloyd’s – Profile & Reality May 2005 13

4

Security – Lloyd’s Adjusts

During the year, Lloyd's made its debut in the international debt markets, raising approximately £500m of long-term subordinated debt.

The balance on the Central Fund, including the subordinated loan issue, and after taking account of the reinsurance arbitration, amounted to £1,184 million at 31 December 2004.

The debt, which was issued in a mixture of sterling and euros, is rated BBB+ by Standard & Poor's and Fitch Ratings, and bbb+ by A.M. Best, and is listed on the London Stock Exchange.

Central Fund Corporation assets Subordinated debt issue Total

This bond follows after the five year stop loss facility, which expired at the end of 2003, and which was the subject of dispute with the reinsurers. This contract was finally settled in arbitration during the first quarter of 2005.

In addition a 3% call on the 2005 Stamp Capacity of £13,720 million would deliver £412million.

£556m £122m £506m £1,184m

Willis Lloyd’s – Profile & Reality May 2005 14

5 Equitas Whilst Lloyd's does not own Equitas (which is an independent company, separately regulated by the FSA), there is undoubtedly a linkage in policyholders' minds. As such, the following comments are included here. Asbestos, Asbestos The most serious development for Equitas in recent months has been the publicity that has made plain that there is a real possibility that Congress may enact Asbestos legislation that would give scope to non-Equitas entities to enter special pleadings relative to their circumstances. Naturally Equitas feels that any such arrangements carry an aura of unfairness if they expressly exclude Equitas. As at date of going to press, it appears probable that Equitas will avoid unfairness of this nature. However, the scope for the Asbestos legislation initiative to come to fruition is still wholly unclear.

Equitas

Is a "Past Call" a Possibility? Original policyholders are thought to have some potential to achieve residual value by virtue of applying to the Names who issued the original policies. These Names of course paid a premium to "reinsurance to close" their liabilities, often many years ago, but the fact remains that they were the original security behind the original policies, and the policyholders retain rights of recourse against their original security. Obviously the great majority of the Names who issued policies in the 1950s and 1960s are likely to be deceased, and claims against their estates or their executors are commonly thought to be far-fetched. More recent policies may have a larger proportion of extant Names. In this context it may be worth considering the extent to which the economics would be attractive to claimants, if it might be that the cost of pursuing claims could exceed the individual amounts recoverable for the individual Names that are still alive.

Is a Future Call a Possibility? It remains an open question whether the recent escalation in Asbestos litigation could seriously imperil Equitas' solvency. Certainly the scale of free surplus that currently supports Equitas would not be sufficient to withstand a reappraisal of reserves that was so serious as to require a doubling of existing asbestos reserves. Perhaps Standard & Poor's assessment is worth quoting: "In the medium term, Standard and Poor's currently considers that a £500 million [$942.6 million] capital deficiency at Equitas could be managed by Lloyd's".

Willis Lloyd’s – Profile & Reality May 2005 15

6 Costs & Compliance Compliance continues to figure in managements' minds as a subject that is demanding of resource and open-ended as to its requirements. This works against Lloyd's in the context of all market participants who have any kind of non-Lloyd's alternative, in that the non-Lloyd's alternative already has its own set of compliance and reporting demands. For these businesses, the prospect of keeping within the (non-Lloyd's) guidelines for the non-Lloyd's parts of their business, whilst doubling up for the Lloyd's element with a second layer of compliance requirements for the Lloyd's elements, must be a matter of concern. Against this there is evidence of substantial support among businesses at Lloyd's, many of whom see the Franchise Performance regime as being key to the reduction of the costs of mutuality through its more effective protection of the Central Fund. There is no simple solution here. Lloyd's absolutely has to maintain a vigorous compliance regime. For a range of good reasons it is bound to vary from the Bermudian, the NAIC's and the other regimes open for consideration. Market forces are inevitably going to gravitate towards the easiest option, albeit that this may carry exposure to being at the expense of security issues. The current context of regulation at Lloyd's unfortunately may mean that these pressures are not helping develop Lloyd's as an optimally attractive framework for business in the coming years – but this may well serve to assist Lloyd's in managing the down-cycle in the best way possible.

Costs & Compliance

Turning to costs, Lloyd's should be applauded for its efforts to bring some of the central charges under control. However it is undeniable that many businesses feel the weight of these overheads very acutely. Wherever there is scope to avoid these charges, there is continuing pressure to move business away from the market, although this pressure has reduced considerably as the central charges have fallen (see table on page 17). If the customer seeks the additional security of the Lloyd's Central Fund, then of course to some degree the customer has the choice to pay for that extra security by using Lloyd's-based security. But it is not clear how many customers feel the value of this choice where it is available. Entities at Lloyd's have long enjoyed a notable advantage over their corporate counterparts in their freedom to use Letters of Credit in lieu of subscribed capital and surplus. Not every Member uses this facility by any means, but for some it is a key attraction. Cost is often discussed in very loosely defined terms (it may be noted that we have deliberately avoided this issue here) but, in the broader sense of the subject, we observe that the scope to win efficiencies in relation to cost of capital is widely underestimated. We expect to see this issue gaining wider appreciation in the near to medium term future, and as this happens, we would hope to see Lloyd's being perceived as having real cost advantages.

Willis Lloyd’s – Profile & Reality May 2005 16

6

Costs & Compliance

Lloyd’s Costs Structure for Underwriting Members Percentage of Capacity Members’ subscriptions Central Fund Contributions Premium levy Total

1997 0.70 0.60 1.10 2.40

1998 0.50 1.00 1.10 2.60

1999 0.35 1.00 1.10 2.45

2000 0.25 1.00 1.10 2.35

2001 0.25 0.75 1.10 2.10

2002 0.25 1.00 2.00 3.25

2003 0.25 1.00 2.00 3.25

2004 0.50 1.25 NIL 1.75

2005 0.50 0.50 NIL 1.00

Syndicate/Member Loan Callable Central Fund contributions

NIL