Slide 1: TOWER
Slide 2: TOWER Market Update
y TOWER TOWER Market Update Keith Taylor — Acting Group Chief Executive Jim Minto — Chief Executive TOWER Australia Sydney, 5 March 2003
Slide 3: An update on recent events and business performance of TOWER
TOWER m An update on recent events and business performance of TOWER and its Group Companies m Not a quarterly financial results announcement m Note: All financial numbers stated are based on unaudited management accounts for 3 months to 31 December 2002
Slide 4: Profitable first quarter and key developments
y TOWER m Profitable 1st quarter — all operating companies and Group m Capital position improved m Steps taken on implementation of operational and key strategic issues m Changes in Board composition m GPG welcomed as major shareholder (9.9% shareholding)
Slide 5: Board and senior management changes
Board Chairman - Olaf O’Duill (replaced Colin Beyer) Retirement by rotation of 3 current Directors: Colin Beyer, Lindsay Cuming and Sir Colin Maiden — not seeking re-election at Annual Meeting 4 candidates for 3 vacancies on the Board - including 2 GPG nominations Group CEO appointment Senior manage
Slide 6: Focus - Grow - Deliver
y TOWER m TOWER -— Australasian financial services company focused on providing competitive risk and investment products, platforms and services to its customers m Focus — Grow — Deliver m Short-term focus - operational and key strategic issues > Expense management across the Group > Sales re-invigo
Slide 7: Revenue and management expenses, 3 months to 31 December 2002
F TOWER Based on unaudited management accounts (3 months to 31 December 2002) m Conditions far less favourable than previous corresponding period m Revenue > Premium* and Fee income $246m (+5% pcp) > Investment income $65m (-67% pcp) m Management expenses > Normalised $75m (-4% pcp) > Non-recurring/
Slide 8: Profit from operations and NPAT
Based on unaudited management accounts (3 months to 31 December 2002) m Profit from operations $8.6m (-50% pcp) m Net investment return on shareholder funds $2.8m (-82% pcp) m NPAT $5.4m (-78% pcp) including: > $1.8m redundancy costs > $2.0m direct impact of investment returns > $1.4m divestment/acq
Slide 9: Results by company
TOWER Based on unaudited management accounts (3 months to 31 December 2002) Company TOWER New Zealand =TOWER Insurance * TOWER Health & Life * TOWER Managed Funds TOWER Australia Bridges TOWER Trust TOWER Asset Management TOWER Holdings, Finance Costs & Other
Slide 10: Capital position, debt and dividends
y TOWER m $30m improvement in capital position in TAL by 31 March 2003 m Capital adequacy/solvency m APRA ongoing discussions m Debt m™ Hedging/Derivatives m Future dividends m@ Franking/Triangular tax reform 10
Slide 11: Strategy
TOWER STRATEGY mM Specialist non bank, risk insurer m Tighter focus - narrower but deeper business m Sales re-invigoration - results more medium term m™ Cost initiatives — improve efficiencies to strengthen business m Immediate issues - focus and management expenses > Discontinued some business line
Slide 12: Sales strategy
F TOWER SALES STRATEGY Restructure of TOWER Sales in Australia - completed Third party distribution focus in non bank sector Main product lines: > Risk both personal and corporate > Investment products where superannuation based and sold through same channels Revamped offerings for ail risk products
Slide 13: Operational priorities: staff, expenses, lapses, IT, capital
TOWER m Staff numbers — reduced by 100 since 30 September m Management expenses - tracking in line with budget to 31 December m Lapses and surrenders — experience closely monitored monthly — persistency improved although still not at target levels Annuity book — annuities repriced upwards - assets b
Slide 14: Bridges
y TOWER Bridges m First quarter NPAT 28% ahead of pcp m A$60m increase in FUM, 3 months to 31 Dec 02 m™ Lower than Plan business activity levels — in line with industry m Planner income sharing arrangements well received — implementation April 2003 m Planner recruitment — expect to open 3 new office
Slide 15: TOWER Trust
TOWER TOWER Trust m New senior management team in place m Continued development of retail wealth management model m WRAP business performance m Investment Administration Centre (IAC) now under TOWER Trust 15
Slide 16: New Zealand business achievements
y TOWER m Retained No 1 Retail Funds Manager ranking at 31 December 2002 (FundSource) m TOWER hedge funds — second highest inflow of all funds and fund types for 12 months to 31 December 2002 (FundSource) m Top performing fund in international equity fund category for 12 months to 31 December 2002 (
Slide 17: NZ fund manager return rankings
TOWER m Top of the table for NZ Fund Manager returns in wholesale managed funds survey to 31 Dec 2002 (Mercer Investment Consulting) > Best balanced fund return of all managers over 1, 2, 3, 5 and 10 years 7
Slide 18: Upcoming events: Annual Meeting and 1H03 results
TOWER m 27 March - Annual Meeting m Late May — 1H03 Financial Results announced 18
Slide 19: Slide 19