+16% +19% +30% to R9 303m. to R2 829m. to R4 059m. Core new business Normalised operating profit Normalised headline earnings

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2 Core new business Normalised operating profit Normalised headline earnings +16% to R9 303m +10% to R9 705m incl. DH take-on of new closed schemes and gross revenue for the Vitality Group +19% to R4 059m +30% to R2 829m 2

3 WHY HOW WHAT Make people healthier and enhance and protect their lives Members Improved health, better value through improved price and benefits Life insurance Short-term insurance Long-term savings Health insurance Society Healthier society Improved productivity Reduced healthcare burden Insurer Lower claims Higher margins Positive selection and lower lapses Banking 3

4 The 2018 Ambition best insurer in the world and a powerful force for social good BUSINESSES IMPACT Insurgent Significant engagement Superior actuarial dynamics Meeting complex consumer needs Exceptional service R10bn in pre-tax earnings CPI + 10% profit growth Risk free + 10% return on capital 4 10m Vitality members FOUNDATION BUSINESSES Global platform, science and data Powerful brand Employer of choice for critical skills Values-based culture 4

5 Observations for the period 1 Performance Group performance exceeded expectation, enabling it to track strongly toward its stated 2018 Ambition. Normalised operating profit grew 19%, normalised headline earnings grew 30%, while new business grew 16% 2 Operating model Results were ahead of the stated growth methodology and capital plan, with operating profit growth exceeding CPI + 10% and return on capital exceeding risk free + 10%. The Financial Leverage Ratio (FLR) remained below the 28% guidance at 26.5% while free cash increased to R2.5bn 3 Business performance Established businesses achieved a combined growth in operating profit of 15%. The emerging businesses are all profitable and larger in scale and potential than expected with a combined growth rate of 151%. New developments are all on target for launch and within budget 4 Vitality Shared- Value Insurance Considerable and continued investment took place through the Global Vitality Network, ensuring repeatability and scalability across adjacencies and new geographies there are now over 7m Vitality members in 19 countries with engagement strong across all markets 5

6 Impact Core new business Operating profit Return on capital Cash generated Embedded value 6

7 Operating model Growth methodology Capital management Cash management Group profit growth of CPI + 10% Return on capital risk free + 10% FLR < 28% Cash buffer R1bn - R2bn 7

8 Emerging Established Strong operating profit growth +19% Rm 6 months to 31 Dec months to 31 Dec 2016 % change % to R4 059m % % +19% % % +15% +19% +7% +13% % % 29 (30) +197% 1 (91) +101% +151% 36 (9) +500% H12014 H12015 H12016 H12017 H12018 Bank, Vitality Invest, New commercial insurance, umbrella funds and the GVN Group (352) (244) +44% % 8% of profits % share of Discovery Card profits 8

9 2013 H H H H H H H H H H H1 Emerging businesses experienced rapid growth Discovery Insure gross premium income +30% to R1.3bn Ping An Health written premium +62% to R3.8bn Vitality Group integrated insurance premiums +45% to R1.9bn H H H H H H Fastest growing short-term insurer Fastest growing health insurer in China 12 integrated insurance markets 9

10 Emerging Established Robust core new business growth +16% Rm 6 months to 31 Dec months to 31 Dec 2016 % change to R9 303m +10% to R9 705m incl. DH take-on of new closed schemes and gross revenue for the Vitality Group % % % % % % % H12014 H12015 H12016 H12017 H % 1 Excludes new scheme take-ons 2 Vitality Group fee income from insurance partners 10

11 Strong new business growth from emerging businesses Discovery Insure new business API +22% to R495m Ping An Health new business API +70% to R1 986m Vitality Group fee income from insurance partners +34% to R123m* H12014 H12015 H12016 H12017 H12018 H12014 H12015 H12016 H12017 H12018 H1 FY2016 H1 FY2017 H1 FY2018 *Excludes US corporate business 11

12 Performance exceeded growth engine targets ESTABLISHED Target CPI + 5% Actual CPI + 10% ~3 years EMERGING CPI + 30% CPI + 146% ~5 years NEW 10% 8% CPI + 10% CPI + 14% CPI = 4.7% 12

13 Tracking in line with capital management philosophy Target risk free+10% Actual risk free+11.2% <28% 26.5% R1bn R2bn R2.5bn *Annualised ROE for the six-months based on normalised headline earnings **Risk-free is calculated as the Group s weighted average risk free across the geographies it operates in 13

14 Reconciliation of reported profit to normalised headline earnings Rm 6 months ended Dec months ended Dec 2016 % change Profit from operations Other (incl. finance costs) ( 325) (233) Profit before tax Income tax expense (837) (947) Other adjustments 52 (46) Headline earnings Rebranding and business acquisition expenses - 84 Other Includes gearing effect of loss-making businesses turning profitable and a higher effective tax rate in the prior year UK branding costs carried within businesses Normalised headline earnings Normalised headline earnings per share (diluted): 438.3c (+29%) 14

15 Dividend policy framework Contribution to operating profit Philosophy Dividend cover ratio ~3 years ESTABLISHED EMERGING 90% 20% In line with market No dividend % of profit 0 90% x 40% 0 Dividend cover ~ 4 ~5 years NEW -10% Funded from the dividend 1 10% Dividend declaration of: 101cps (+15%) 15

16 Cash management supports the growth methodology R6.1bn Cash generated by the Group before tax 6, ,845 3, H H H Sources of cash 16

17 Cash management supports the growth methodology R6.1bn Cash generated by the Group before tax FLR 28% Cash buffer R2.5bn R2.bn 4,845 6,107 Uses of cash 1,688 Tax, dividend and finance costs 26.5% 3,511 3,822 New business 1,110 New initiatives H H H Sources of cash 17

18 Return on embedded value (EV) +13% Annualised growth in EV ~15% of total revenue attributable to emerging businesses which are not included in the EV R236m Reduction in EV due to initiatives Group revenue (Rm) incl. 25% of Ping An Health written premium 26,564 23,504 21,193 Opening EV Value of New Business Unwind of Risk Discount Rate Experience Variances Initiatives Other Closing EV H12016 H12017 H12018 Total Group revenue Group revenue excluding emerging businesses 18

19 Significant progress towards achieving 2018 Ambition Prospects Prospects Bank Vitality Invest Insure TVG PAH Umbrella funds Commercial insurance Operating profit R2 367m New business R5 854m Countries 5 Operating profit R4 059m New business R9 705m Countries 19 19

20 Foundation People Values Brand Business model 20

21 Scale and sophistication of the Global Vitality Network 19 countries >7m Vitality members ACTIVE INSURERS ONE members each month >R500m allocated to developing a single global Vitality platform Sumitomo Life first market to run fully on the platform TECHNOLOGY ONE Single Global Platform for insurers, clients, partners, programs and rewards PARTNERS PROGRAMS PRODUCTS ACTIVE REWARDS HEALTHY AGING FAMILY HEALTHY MIND WEIGHT LOSS COVER/FUND BOOST VITALITY FUND DYNAMIC PRICING WEDGE FUNDING DATA C M L E analysis and research repository 40m+ life years of mortality and morbidity data In every minute activities tracked 50 biometric readings 21

22 Addressing physical inactivity as a first priority Significant correlations to mortality Mortality experience by physical activity band (Indexed) Causal impact on healthcare claims Morbidity healthcare claims (Generalised linear model results : five-year inhospital costs) -27% -70% Starting fitness level Large decrease Decrease Change in activity No change Increase Large increase Highly active Active Mildly active Inactive Inactive <1 per week 1-2 per 2-3 per week week 3-5 per week > 5 per week -14% Discovery Data Science Lab internal analysis (2017) 22

23 Two years since the launch of Vitality Active Rewards with Apple Watch 1 Get Apple Watch 2 Achieve your exercise goal 3 Personalised Get Rewarded Weekly rewards Dynamic Any exercise Vitality Active Rewards with Apple Watch Benefit design (US) Get active Achieve your goals Get rewarded Members get the Apple Watch for a once-off activation fee Watch repayments linked to engagement

24 Significant engagement and behaviour change 35% - 110% more active 22%-63% more active in the long run Impact seen across all risks Average exercise days per month after taking up benefit 5.5 exercise days per month to 7.6 BMI Band +35% % Low +28% +29% +90% exercise days per month to % At risk +25% +25% +51% +39% Before After exercise days per month to 13.2 High +34% +20% +74% +110% Number of days of exercise per month 63% Month after taking Apple Watch 1 Low Risk (BMI between 18.5 and 24.9), At Risk (BMI between 25 and 29.9), High Risk (BMI >= 30 or BMI < 18.5) 24

25 Creating shared value Hospital and chronic costs Per life per month healthcare costs 1 of Apple Watch members vs other members over Sep 16-Sep 17 Percentage Better retention Lapse rate for Health and Life policies Indexed to members with no Active Rewards benefit Discovery Health policy lapses -18% Health -81% Active Rewards Only Active Rewards & Apple Watch Life -80% Non Apple Watch Active Rewards & Apple Watch Active Rewards Only Active Rewards & Apple Watch 1 In-hospital and chronic claim costs, risk-adjusted for age, gender, health plan and chronic status. Excludes pregnancy, trauma and certain dental procedures. 25

26 Under Increased disease burden at older ages Risk factors vary by age Increased disease burden at older ages 100% Total chronic disease rate 80% 900 Rate per 1,000 lives 60% % % 300 0% Dietary risks Low PA 100 Smoking & Secondhand smoking Alcohol & Drug Abuse High body-mass index High fasting plasma glucose High systolic blood pressure High total cholesterol Source: Risk Factor Associated with Excess Mortality (US 2015, Female). GBD U.S. Source: DHMS data 26

27 Life expectancy Manifestation in retirement planning 93.6 Average years Vaccinations Physical activity Medical adherence Preventative screenings Shortfall Current savings Current Age: 50 Retirement Age:65 Retirement savings Vitality boost for healthy behaviour Life expectancy for a UK male 27

28 Blue Bronze Silver Gold Transitioning to a single behavioural chassis Health 2018 Vitality Points Blue Bronze Silver Gold Driving Fitness Driving Financial 28

29 Bank Invest Vitality Shared-Value globalisation Expansion into adjacent industries Expansion into adjacent industries Expansion into new markets and partners 29

30 Businesses Emerging Established Discovery Bank Vitality Invest Commercial insurance Umbrella funds New 30

31 2013 H H H H H H H H H H H1 New business Gross Written Premium Operating result +22% to R 495m +30% to R 1.3bn (H1) +197% to R29m H H H H H H H H H H

32 Drivers of the operating result Premium income Claims Expenses 57% CAGR 52% CAGR 32% CAGR 2013 H H H H H H H H H H H1 32

33 Vitality model for Discovery Insure Engagement Loss ratio Lapses Dec 2015 Dec 2016 Dec % -55% -70% +50% Blue Gold and Diamond Blue Bronze Silver Gold Blue Bronze Silver Gold 33

34 Dynamics manifesting in a strong insurance book Claims ratio by cohort duration Claims ratio over time Profit from existing book (Rm) Average book duration: 23 months -35% -13% For the 6 months: Existing Book Premium R1.1bn Existing Book Profit Excl. Associates R99m Year 1 Year 2 & 3 Year 4 + H H H H

35 Direct and intermediated business offer similar value to clients Business mix and growth Value of new business Direct Intermediated Intermediated business has 30% higher VNB But provide the same value to customer per unit of premium paid 61% 59% Premium Claims + rewards New business API: R110m R495m Direct Intermediated 35

36 June 2013 December 2013 June 2014 December 2014 June 2015 December 2015 June 2016 December 2016 June 2017 December 2017 Network Membership +49% to 1.78m PARTNERS GYM & DEVICES GROCERS TRAVEL OTHER ACTIVE REWARDS PRODUCTS LIFE INSURANCE HEALTH INSURANCE UNIT-LINKED PRODUCTS >60 10 CORPORATE WELLNESS

37 Vitality integrated API +45% to R1.9bn* Fee income from insurance partners +34% to R123m* Operating result +101% to R1m H1 FY2016 H1 FY2017 H1 FY2018 H1 FY2016 H1 FY2017 H1 FY2018 H1 FY2016 H1 FY2017 H1 FY2018 *Excludes US corporate business 37

38 Gearing of profit +34% ~70% expenses are fixed Growth in fee income expected to translate directly to growth in operating profit H H H Fixed expenses H Fee income Marginal expenses H Operating profit H

39 Use case: Market A Vitality take-up New business growth Engagement Attractive benefits 29% 35% 4x membership growth 38 average Vitality activities per month per member 2x increase in policy applications after launch of Apple Watch 11bn steps ~170x around the world 2016 Q Q H H H H Month 39

40 Use case: Market B Vitality take-up New business growth Engagement Reduced lapses and improved profitability 66% 4x membership growth 350k workouts tracked per week Vitality members have roughly higher margin 22% than non-vitality members 30% 45% 21bn steps ~ 320x around the world Non-Vitality member 30% 60% December 2015 December 2016 December 2017 December 2015 December 2016 December 2017 Bronze Silver+ 40

41 Increasing expansion into new markets and partners Maturity of market < 1 year / New 2 years 3 years 4+ years Japanese insurance market Americas Asia-Pacific World s 2 nd largest life insurance market 152m $316bn Policies inforce Gross written premiums Europe Australia Sumitomo Life Market rank Policies In- force Launched Austria October 2017 Launched DVAG Germany s largest IFA network which has 30,000 fulltime sales representatives servicing 6m clients Launched Vitality Active in South Korea December 2017 Launching Q ACTIVE INSURERS New market by Q Strong pipeline 4th 8m In-force ANP $22.9bn 41

42 Ping An Health ecosystem Expertise Insurer Products Distribution LIFE AGENTS 1.4m+ life insurance sales agents outlets across China 1.4bn people Group Individual HEALTH DISTRIBUTION 11 branches cover >100m people HEALTH Online 41 branches across China ANNUITY & P&C AGENTS 140k Insurance Agents ONLINE 430m+ internet users 310m+ app users Support of Ping An Group health assets Ping An Group is the largest insurance company and 39 th largest company in the world PLATFORMS Wanjia Clinics Good Doctor DATA TECHNOLOGIES Health Records, AI, Cloud etc. 42

43 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Ping An Health continues to extend reach Branch network covers most of largest cities and continues expanding Moving online with explosive growth Population (Millions) Business mix (R revenue) New business sales (API) Guangzhou Beijing Shanghai Wuhan Chongqing Hangzhou 8% 37% Selling k policies per month Sold through App, Alipay, T-mall, JD, WeChat Store, Broker platforms and PA Life Xian Changzhou Shenzhen Shantou Nanjing Jinan Tianjin Harbin Wuhan Xian Nanjing Guangzhou 8% 36% 50% 19% 42% Chengdu Not covered New York City Existing Group Intermediated Internet Other

44 New business Written premium Ping An Health operating profit Discovery s operating profit +70% to R2bn +62% to R3.8bn 10x to R244m +500% to R36m H1 FY2014 H1 FY2015 H1 FY2016 H1 FY2017 H1 FY2018 H1 FY2015 H1 FY2016 H1 FY2017 H1 FY2018 H1 FY2015 H1 FY2016 H1 FY2017 H1 FY2018 H1 FY2015 H1 FY2016 After central costs H1 FY2017 H1 FY

45 Businesses Emerging Established Discovery Bank Vitality Invest Commercial insurance Umbrella funds New 45

46 New business Membership Operating profit +10% to R3 324m excl. take-on of new closed schemes >3.4m lives +12% to R1 332m DHMS Restricted Schemes H H H H H H H H H H

47 Discovery Health Medical Scheme continues to deliver strong and consistent growth dynamics and financial performance Growth Stability Security 56% Market Share 41k New lives 2.78 million lives 94% 3% 3% No movement Upgrade Downgrade 27.45% Solvency R16.3bn Reserves R2.45bn Net surplus 5% Annualised lapse rate AA+ GCR credit rating 47

48 The healthcare trilemma Cost COST DISEASE BURDEN TREATMENT COST MEMBER MEMBER DISEASE BURDEN TREATMENT A+ PREVENTION QUALITY ACCESS AND COST Access Quality 48

49 COST DISEASE BURDEN TREATMENT COST MEMBER MEMBER DISEASE BURDEN TREATMENT 7.9% contribution increase (DHMS) 16% cheaper than market 49

50 Impact of managed care initiatives KidneyCare programme DiabetesCare programme 100% of dialysis centres and patients enrolled Detailed monitoring of key dialysis metrics Detailed reporting and feedback Enrollment unlocks additional risk benefits Access to high quality coordinated care Admission rate Length of stay per admission % diabetics who have had an HbA1c test % diabetics with medication compliance All admissions Renal related admissions All LoS Renal related LoS DiabetesCare Non-DiabetesCare DiabetesCare Non-DiabetesCare -18.2% -11.7% -4.1% 0.6% +30% -1% +14% +1% 50

51 2014/ / / / / / / / / / / / / /06 Record fraud savings and recoveries in 2017 Significant fraud savings Sophisticated fraud analytics and tools Fraud savings and recoveries in 2017 (Rm) Code gaming Network analysis False claims analysis Jan-15 Jan-16 Jan-17 R539m in savings and recoveries 213 Monthly fraud probes >>>>>>>>>>>>>>>>>>>> Time >>>>>>>>>>>>>>>>>>>> 24m claims lines processed Informa TM reports 51

52 Extensive provider networks Network Geographic Presence Reach GPs >5 700 practices 87% of total GP visits within the Discovery Health network Specialists >6 400 specialists 89% of total specialist visits within the Discovery Health network Hospitals >670 facilities 94% in-hospital coverage ratio 52

53 Providing affordable healthcare for members Savings through Vitality and managed care Competitive contributions for members Value for money 43 R6.2bn % in savings DHMS weighted average contribution increase 7.9% For 2018 R2 Value generated for every R1 paid to Discovery Health % % Lower premiums compared to market average (weighted) 10.1% DH Total fees as a % of GCI Potential Risk Claims Risk Management Vitality Impact Savings Actual Risk Claims ~14% reduction in risk claims DHMS Next 9 largest open schemes *Unaudited results 53

54 Impact of the Discovery Health system on restricted schemes claims inflation Weighted claims inflation for schemes pre and post Discovery Health administration Glencore Bankmed 13.4% 19.8% 10.3% 12.0% 7.0% 7.4% 8.5% 3.7% 5.7% % Average Increase: 15.9% Average Increase: 2.0% Average Increase: 8.7% Average Increase: 6.0% Pre Discovery Health Post Discovery Health 54

55 New business +6% to R1 121m Operating profit +4% to R1 839m H H H H H H H H H H

56 Derivation of profit Profit Profit margin 1 DL profit estimate Revenue x VNB margin* Reconciliation (accounting to estimate) Rm 3,334 3,607 3,368 3,174 Fluctuations 2 Experience variances 1,839 1,866 Return on Assets 3 Discount rate x Negative reserve 2016 FY 2017 FY 2018 H1 * Gross of COC and Tax 56

57 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 New business dynamics remain strong Growth in market share Acceleration in Q2 post launch Increasing VNB margin 25.7% 25.9% 22% 26.4% 27.5% Individual Life new business growth vs. H (incl Servicing, excl ACI's) 7% 6% 6% Individual Life new business 11.5% 12.7% 20% 20% 18% 10.6% -2% -7% -11% YTD* Discovery Insurer A Insurer B Insurer C Insurer D Other H H H Source: NMG Report *Sep

58 Positive experience variances for half year Experience variances over time Variances in H (Rm) Trend in policy alterations Life and Invest experience variances over time Extended modelling term Expenses Lapses Rm Dec16 Dec Economic Policy alterations Mortality and morbidity Premium income -98 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec

59 Reinsurer validation of the model Actual experience vs. Standard life q(x) Actual = Expected (Standard life), risk adjusted -20% VS. Other SA insurers DL Book Blue Bronze Silver Gold Diamond Source: Global reinsurer 59

60 Claims volatility from non-natural deaths Suicide as percentage of death claims Small number of large policies Other Other Other Other Suicide claims in six months is double historic six month experience Rm 144 Cancer Cancer Cancer Cancer Nervous MVA Nervous MVA Nervous MVA Nervous MVA Crime and Trauma 63 Crime and Trauma Suicide 6% Crime and Trauma Crime and Trauma Suicide 10% 7% Suicide Suicide 16% FY 2015 FY 2016 FY 2017 H FY Dec

61 Mortality rates Dynamic pricing leads to dynamic mortality expectations Vitality status and rewards Dynamic pricing Expectations of mortality By policy count 50% Bent q(x) 20% 21% 9% Blue Bronze Silver Gold By sum assured 44% 20% 10% 26% 1 2 Significant upfront premium discounts including Vitality Dynamic pricing and behaviour change 30 to to to to to to to to 69 Blue Bronze Silver Gold R2.5bn in premium discounts and PayBacks in the last six months 3 Regular PayBacks based on status None Blue Bronze Silver Gold 61

62 Vitality status driving extraordinary engagement Actuarial refinement Proliferation of wearables End of year points rush 23% 10% 5% Online Unverifiable, lower weighting Nutrition Physical activity days per life policy x2 Vitality Health Check 8% 41% Exercise Focus on intensity vs. quantity Flu vaccinations 32% CRF and HR verified activities, support increased use of devices and steps Screening 2 38% 44% Shift focus to outcomes vs. participation and focus on verifiable results CPR courses Gym Device Steps Outdoor Device Workout Outdoor ParkRun Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

63 Fraud detection models and machine learning 99.2% of clients truthful but Discovery Life Gold clients confirmed fraudulent Gold 500m exercise readings 5m biometric readings; 10k> healthcare professionals 10k > adviser client books Device Model Provider Model Adviser Model MOTION HR GPS Identification of identical or unusual workout signatures (HR, Steps, Calories, Peaks etc.) over multiple clients BEHAVIOUR VALUES GPS Outlier modelling to identify unusual readings, quantity, geomapping etc. by healthcare provider BEHAVIOUR DURATION GPS Time-series model of expected over actual status progression, unusual value identification Device Sharer Shaker Hacker 63

64 Robustness of the negative reserve DL profit estimate Negative reserve robust despite sensitivities in assumptions (Rm) 2,087 2,023 2,277 1 Revenue x VNB margin* 20,243 1 st and 2 nd Tier margins 2 Experience variances 44,251 Negative reserve excl. margins 3 Discount rate x Negative reserve Reserve + Margins Sensitvity impact: Claims + 5% Sensitvity impact : Interest rate + 1% Sensitivity impact: Lapses + 10% * Gross of COC and Tax 64

65 Net flows +20% to R3.3bn Operating profit +29% to R419m HY HY HY HY HY H H H H H

66 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Drivers of operating performance Assets under management Business mix VNB margin +22% to R77.8bn 2.5% 2.7% 77% in Discovery funds Jun17 Dec17 66

67 Brilliant fund performance Discovery Invest ranked 4 th in PlexCrown ratings (Up from 12 th ) Fund Fund Size 1 Year Return Sector Quartile 3 Year Return (Annualised) Sector Quartile 5 Year Return (Annualised) Sector Quartile Discovery Balanced Fund R22bn 11.3% 2 8.1% % 1 Discovery Equity Fund R2bn 13.9% 2 9.1% 1 6.1% 4 Discovery Flexible Property Fund Discovery Moderate Balanced Fund Discovery Cautious Balanced Fund R3bn 16.3% % % 2 R0.9bn 11.3% 1 8% % 1 R1.6bn 10.2% 1 7.5% 1 9.0% 1 67

68 New business Operating profit Lives covered +5% to R1.08bn ( 61m) +54% to R616m ( 35m) +7% to 1.02m lives H H H H H H H H H H

69 Exceptional engagement Number of points-earning activities undertaken +58% to 30m 52k Apple Watch sold to date Physical activity events +42% 3.5m workouts tracked per week Screening and preventative care +11% >5m Starbucks drinks to date

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71 Vitality brand competes on its own terms Antagonist Stanley Creates brand tension with charming irreverence for healthy living messaging I think I ll just stay here actually I m not built for squats My Vitality age is 24. That s 168 in dog years. Wearing well, Jessica. Inspirational Vitality ambassadors Bring fame and credibility as the inspiring embodiment of healthy living Jessica Ennis-Hill Jonny Wilkinson Maro Itoje Ellie Simmonds Joe Root Visible Sporting strategy Believe in the power of sport to help inspire people to live a healthy life. Partner with leading teams and events to spread the Vitality message 71

72 Brand strategy yields powerful presence Prompted brand awareness of Vitality Leads generated through direct channels Achieved after 10 years of brand investment 45% 38% 46% after 3 years +50% 14% Nov 14 Nov 17 H H H

73 New business Operating profit -4% to R557m ( 31.5m) +1% to R261m ( 14.8m) H H H H H H H H H H

74 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Interest rate (%) Interest rate environment UK spot yields Monthly interest rate over time Brexit Impacted reserves by approximately 75m over time Y Spot Real Spot Yield (25Y) 74

75 Dec'13 Jun'14 Dec'14 Jun'15 Dec'15 Jun'16 Dec'16 Jun'17 Dec'17 Business has been reconfigured for low interest rate environment Term assurance mix New business mix 65% 71% 76% 92% 96% Term WoL Annualised VNB Margin 11.4% 11.5% New business mix Indexed Level Impact of Brexit Indexed premium mix 22% 25% 30% 27% 36% 5.1% 6.7% Optimizer Jan 2017: 60% Dec 2017: 70% 1.8x 34% 3.5% Impact of re-pricing Optimizer take-up: average number of benefits higher premium 75

76 Upside as interest rates rise UK 25y spot yield Interest rate used for valuations 1bps increase in interest rate (at current levels) m Change in reserve Dec Jan Feb 76

77 New business +18% Operating profit +150% to R522m ( 29.5m) to R355m ( 20.1m) H H H H H H H H H H

78 Strong operating performance driven by key factors Vitality engagement Member engagement continues to increase rapidly Number of points earning activities +90% 31-45% reduction in risk factors Selective retention Value and retention propensity models used to improve effectiveness of renewal pricing Lapse rates indexed to Bronze -33% -60% Silver Gold Platinum Contributes 45% to loss ratio improvement Tariff savings and risk management Tariff savings: Care pathways: ~15% improvement in cost per claim 78

79 Errors Sophisticated machine learning applied in multiple contexts Unique data set Gradient boosting machines 1 Demographic & health status (age, health conditions, postal code etc) 3 Health System interactions (hospital network, referrals etc) Model Learning algorithms that reduce prediction errors as they iterate 2 Wellness behaviour (exercise, nutrition, smoking, rewards etc) Algorithm iterations > 100 behavioural & geospatial indices > 100m possible combinations of risk factors >2.75 TB of data Uses new business and renewal pricing lapse propensity models sales and marketing engagement risk management fraud detection 79

80 Jan-13-Dec-13 Mar-13-Feb-14 May-13-Apr-14 Jul-13-Jun-14 Sep-13-Aug-14 Nov-13-Oct-14 Jan-14-Dec-14 Mar-14-Feb-15 May-14-Apr-15 Jul-14-Jun-15 Sep-14-Aug-15 Nov-14-Oct-15 Jan-15-Dec-15 Mar-15-Feb-16 May-15-Apr-16 Jul-15-Jun-16 Sep-15-Aug-16 Nov-15-Oct-16 Jan-16-Dec-16 Mar-16-Feb-17 May-16-Apr-17 Jul-16-Jun-17 Sep-16-Aug-17 Nov-16-Oct-17 Jan-17-Dec-17 Significant improvement in risk profit and strong cash generation Claims per life per month rolling 12-month avg after reserving adjustments Expected claims 5% projected medical inflation Cash from in-force ( m) 47.7 Acquisition costs ( m) H H H H H H H H H H Actual claims 3 Net cash generated ( m) Quality of the book and increasing Vitality engagement 2 Tariff savings 3 Clinical risk savings built on sophisticated systems H H H H H

81 Businesses Emerging Established Discovery Bank Vitality Invest Commercial insurance Umbrella funds New 81

82 Observations for the period 1 Performance 2 Operating model 3 Business performance 4 Vitality Shared- Value Insurance 82

83 83