Ann: Investor briefing - AASB 17 pro forma historical financials, page-2

Management correctly point out no changes to economics of the business; only some changes to when and how premiums are recognised as revenue, and how risk is treated.

. . . . . . . . except . . . . . . . .

- Recognised revenues will be lower due to:

>earnings curve being pushed out to 15 years, resulting in 15% lower than previous recognition of revenues in cohort years 2-5;

>extension of earnings from 12 to 15 years yields little as 2010 & prior cohorts have already had their revenues recognised in full.

- Upon cancellation of an existing LMI policy:

>Revenues now recognised over the remainder of the 15 year recognition curve (rather than immediately, as was previously),

>Capital is still released immediately (so cancellations free up capital for buy backs, but not the profits necessary to pay out as dividends).

- Present Value of loss making cohorts in 2010-2014 must be recognised adversely to the P/L immediately.

- Net Assets will decrease $215m (as do retained earnings) due to one-off increase in unearned liabilities, so NTA will decrease as well (although management have stopped talking about this metric)

- PCA remains the same