Liberty Group Inaugural subordinated unsecured callable bond Presentation

Liberty Group Inaugural subordinated unsecured callable bond Presentation to investors May 2005

Roadshow team Liberty • Myles Ruck, Chief Executive Officer • Deon de Klerk, Chief Financial Officer • Stewart Rider, Group Executive – Finance and Investor relations • Samuel Sathekge, Financial Accountant – Group Finance JPMorgan – Joint Lead Arranger and Bookrunner • Marc Hussey, Head of Debt Capital Markets Standard Bank – Joint Lead Arranger and Bookrunner • Andrew Pamphilon, Debt Origination Andisa Securities – Co-arranger • Chris Clarkson, Head of Debt & Capital Markets Group 1

Agenda Overview Operating review Financial review Capital management strategy The proposed bond instrument Summary and Questions Appendix 2

Corporate Structure (as at 31 -12 -2004) Standard Bank Rated AA+(zaf) – Long Term Issuer (54, 65%) Liberty Holdings Limited (50, 17%) Liberty Group Limited Rated AA(zaf) - Insurer Financial Strength Rated AA-(zaf) – Long Term Issuer Life Assurance Asset Management • Liberty Personal Benefits • STANLIB (37, 4%) • Liberty Corporate Benefits • Liberty Ermitage • Liberty Active • Liberty Properties 3

Industry issues • Increasing compliance and regulatory requirements • Volatile investment markets • Risk averse investors • Perception of industry • AIDS (not as much an issue for Liberty Life) 4

Industry positives • Industry has started recognising its shortcomings • Emerging middle class - a reality, but net spenders • South African economy - a success story • Investors becoming more bullish • Good local investment returns • Cash being accumulated by investors = opportunity 5

Nature of the business Liberty’s business is conceptually simple and generic • We develop products • We sell products • We receive money • We invest the money according to product specification • We administer according to product specification • We pay benefits 6

Key strengths • Strong business franchise – Pure SA life insurance play, revised management team – Very high investment-grade credit ratings from Fitch (AA Insurer Financial Strength Rating and AA- Long Term Issuer Rating) – Strong parent in Standard Bank Group (AA+/F 1+) – Limited exposure to smoothed bonus business – Market positioning (trend of increasing market share) and solid brand recognition • Competitive advantages – Diversification of business mix and breadth of product range – Distribution channels and resources 7

Key strengths (cont’d) • Solid financial indicators – Increasing market share – Positive net cash flows from insurance operations – Strong capital base with good CAR cover – Inroads being made on expense base – Proven resilience in times of tough operating environments • Potential for growth - Upper income market (traditional Liberty) - Emerging market (Liberty Active) - Bancassurance (Standard Bank) 8

Agenda Overview Operating review Financial review Capital management strategy The proposed bond instrument Summary and Questions Appendix 9

Overview of the Group’s embedded value (proxy for cash flow drivers) 2004 2003 10

Business units Liberty Corporate Benefits (LCB) Individual Life (LPB and Liberty Active) • Individual insurance and investment products • Life, disability, local investments, offshore investments, retirement savings, preservation schemes and annuities • Middle and upper income, and high net worth clients • Targeting lower income group through Liberty Active • Markets and administers flexible, comprehensive and packaged solutions to the retirement funding and insured needs of small-to-medium size companies (staff of between 10 and 300) • Also manages larger corporate funds • Uses four channels of distribution (viz. Agents, Franchises, Brokers and Standard Bank Financial Consultants) • Client funds spread across geographic regions and industries Key performance indicators Rm 2004 2003 % change Indexed new business 3, 544 3, 184 +11 Indexed new business New single premiums New recurring premiums Net cash flows 8, 700 6, 808 +25 2, 674 2, 504 +8 5, 492 3, 120 +76 New single premiums New recurring premiums Net cash flows 1 10, 867 10, 436 +4 819 571 +43 Claims and benefits Value of new business Rm Claims and benefits Value of new business 1 2004 2003 % change 643 624 +3 1, 582 1, 924 -18 484 431 +12 (1, 852) 1, 377 235 6, 048 3, 189 +90 (4) 37 -111 One client maturity of R 2. 1 billion in a property-backed portfolio (2004) 11

Business units (cont’d) STANLIB Liberty Ermitage (Jersey) • Established in 2002, combining the asset and wealth management businesses of Liberty and Standard Bank • Jersey-based fund management company, specialising in hedge funds • 41% third party funds • Liberty Group and Standard Bank each hold 37. 5%, with BEE partners holding 25% • Representative offices in London, Luxembourg, Bermuda and New York • Focus on asset management of retail and institutional investments Key performance indicators Rm Net cash flows Assets under mgmt 1 Headline earnings 1 Excluding common assets Key performance indicators Rm 2004 2003 % change Net cash flows 3, 681 1, 653 123 20, 533 18, 513 +11 46 43 +7 2004 2003 % change 15, 300 12, 100 26 137, 926 113, 978 +21 Assets under mgmt 1 119 80 +49 Headline earnings 1 Excluding common assets 12

Agenda Overview Operating review Financial review Capital management strategy The proposed bond instrument Summary and Questions Appendix 13

Financial summary – 4 year history Income statement (Rm) 1 2 3 4 The sum of new recurring premiums plus 10% of new single premiums The present value, at the time of sale, of the projected stream of after-tax profits from that business Expresses the embedded value of new business as a percentage of indexed new business (net of natural increases) The excess of total premiums over total policyholder claims and benefits 14

Headline earnings (Rm) Key features • 10% shareholders’ participation • Higher average asset base • Investment guarantee reserves • Management expenses • Strong underlying Stanlib, Ermitage growth 15

Financial summary (cont’d) Balance Sheet (Rm) Policyholder liabilities and total assets (Rbn) • BEE technical impairment of R 1, 251 m in FY 2004 • Only 40% of shareholders’ funds in equities – equity concentration now largely resolved 16

Embedded value (Rm) 16, 867 14, 767 15, 127 15, 817 11, 941 17

Agenda Overview Operating review Financial review Capital management strategy The proposed bond instrument Summary and Questions Appendix 18

Capital management strategy Liberty Life’s capital adequacy (prior to Capital Alliance acquisition) Comments on level of capital Impact of the BEE and CAL transactions on CAR • Liberty’s capital covers potential additional charges, fraud, errors, uninsured risks, etc. • Pre the proposed takeover of Capital Alliance Limited (CAL) and allowing for full impairment for the BEE capital, CAR cover was 2. 1 x. - In line with what was communicated to the market after the BEE transaction • Stochastic modelling of embedded guarantees results in volatility (pricing policyholder put) • New risk product requires more capital • International accounting standards could influence ratios • Liberty endeavours to find a balance between ROE/ROEV and security, and our capital takes into account our lower risk business mix • Medium term CAR target levels are 1. 5 x – 1. 7 x • Dividend policy introduced in line with medium term EV growth - More than adequate allowing for the CAL deal to follow • Estimated CAR post the CAL deal and dividend payments due to Liberty and CAL shareholders, would be in the range of 1. 60 x— 1. 70 x by December 2005. - This assumes no additional benefits from pooling the CAR levels of the two integrated companies 19

Agenda Overview Operating review Financial review Capital management strategy The proposed bond instrument Summary and Questions Appendix 20

The subordinated, unsecured secondary capital issue • We believe Liberty is the first South African insurance company to be granted FSB approval to issue regulatory capital in the form of a bond - Approval was given early in May 2005 • The benefits of the instrument to Liberty include: - Enhancing regulatory capital adequacy ratios - Diversifying funding sources - Reducing the cost of capital and - This evolution is similar to the bank market where all of South Africa’s major banks have successfully raised regulatory capital in the form of bonds • The proposed form of debt instrument is virtually identical to the secondary capital issued by all of the four major banks in South Africa 21

Summary terms Issuer: Liberty Group Limited Insurer Financial Strength Rating AA (zaf) Long-term Issuer Rating: AA- (zaf) Amount: Up to ZAR [2]bn, subject to market conditions Status: Subordinated, unsecured secondary capital Legal Maturity: [12 years, due 2017] Step-up/call date: [7 years, 2012] Coupon [ ]% semi-annual fixed rate, stepping up to 3 M Jibar + [100 bps and the initial swap rate] after the Step-up/call date Pricing: R 153 + spread Listing: BESA Governing Law: South African law 22

Comparison between the new LG 01 bond and the SBK 5 bond SBK 5 Maturity Pricing at launch Subordinated to senior credits Callable after 7 years Step-up +100 bps Call subject to regulatory approval Qualifying regulatory capital LG 01 12 non-call 7 R 153 + 95 TBD 23

Impact of the bond on key ratios (pro forma 2004) Pre-bond Post-bond 12. 8% 11. 9% CAR cover 2. 1 x 2. 7 x Debt/Equity N/A 23. 5% Debt/Total Capital N/A 19. 1% Interest cover ratio N/A 8. 6 x Weighted average cost of capital Source: Company estimates. Based on December 31, 2004 financials 24

Why Liberty paper • Strong cash flows • High interest cover and low debt ratios • Conservative regulator • Sustainable growing business • Track record of delivery 25

Agenda Overview Operating review Financial review Capital management strategy The proposed bond instrument Issue process and deal contacts Appendix 26

Issue process • Roadshow: [May 25 - 27] • Bookbuild, launch and price: June [6] (begin 9 am) • All bonds will be allocated at the same clearing spread • Early, firm and aggressive bids to be rewarded during allocations 27

Contacts Issuer contacts Arranger contacts • Deon de Klerk Tel: (011) 408 2572 E-mail: deon. deklerk@liberty. co. za • Andrew Pamphilon Tel: (011) 378 7003 E-mail: andrew. pamphilon@standardbank. co. za • John Sturgeon Tel: (011) 408 2872 E-mail: john. sturgeon@liberty. co. za • Marc Hussey Tel: (011) 507 0730 E-mail: marc. j. hussey@jpmorgan. com • Stewart Rider Tel: (011) 408 3260 E-mail: stewart. rider@liberty. co. za • Chris Clarkson Tel (011) 374 1291 E-mail: clarksonc@standardbank. co. za • Samuel Sathekge Tel: (011) 408 3063 E-mail: samuel. sathekge@liberty. co. za 28

Agenda Overview Operating review Financial review Capital management strategy The proposed bond instrument Issue process and deal contacts Appendix 29

Comparison of debt-to-capital ratio with European peers Source: JPMorgan estimates 30

Peer comparison - total new business Rm 2002 2003 I = Individual; G = Group; Source: company financial statements 2004 31

Peer comparison - indexed new life business* Rm 2002 2003 2004 * Indexed new business as per embedded value statement; Source: company financial statements 32

Peer comparison - net flow of funds from life insurance operations Rm Liberty Sanlam 2002 Source: company financial statements Old Mutual 2003 Momentum Discovery (Life) 2004 33

Peer comparison - embedded value Rm LGL SLM OML NAV and subs VIF Source: company financial statements MOM DSY 34

Gross investment returns 22. 7% Actuarial assumption 12. 5% 35