OUTLINE

• New terms were agreed for the Club's hybrid capital bond on 7 June 2013
• The new terms were concluded through a process of 'consent solicitation'
• Full details of the background information on the consent solicitation process were published on the
  Club's website

TO THE MEMBERS

Dear Sirs

AMENDMENT OF TERMS FOR HYBRID CAPITAL BOND THROUGH CONSENT SOLICITATIONConsent solicitation process

On 7 June 2013 the Club's consent solicitation process was successfully concluded with the proportion of noteholders voting in favour of amended terms for the hybrid capital bond (Capital Securities), including a revised first call date, fixed interest rate and floating interest rate, comfortably exceeding the required target of 75 per cent.

The revised terms agreed at the meeting included:

(a) amending the fixed interest rate payable in respect of the Capital Securities in respect of the period from (and including) 22 August 2013 to (but excluding) 22 August 2018, to 7.5 per cent;

(b) amending the floating interest rate payable in respect of the Capital Securities in respect of each interest period commencing on or after 22 August 2018, by reference to a new margin; and

(c) replacing the current first call date with a new first call date of 22 August 2018.

Background

The Club's decision to raise the $100million hybrid capital in 2008 was in preparation for the introduction of EU Solvency 2 Directive in 2012. The Club's hybrid capital counts for regulatory and rating agency purposes. Such bonds have been recognised as providing an efficient means for insurers to raise such capital.

Club Circular 8/08

and its annex of FAQs explained the initial issue of the hybrid capital. Explanation of the consent solicitation process and other information on the hybrid capital can be found on the Club's website.

Yours faithfully

THE MANAGERS
CONTACT

• Members requiring further information should contact Jonathan Goldthorpe on +44 20 7204 2252, Email:

jonathan.goldthorpe@thomasmiller.com

.