Healthier, Longer, Better Lives

Definitions and Notes (Cont.) AIA IFRS operating profit includes the expected long-term investment return for equities and real estate. ■ Investment return and composition of investments exclude unit-linked contracts and consolidated investment funds. ☐ ■ ☐ own use. Investment return is defined as investment income with the addition of realised and unrealised gains and losses as a percentage of average investments excluding property held for Investments include financial investments, investment property, property held for own use, and cash and cash equivalents. Investment property and property held for own use are at fair value. Persistency is the proportion of the total business, as measured by annualised premiums, that is retained over the previous 12 months without being lapsed or surrendered. PVNBP margin refers to margin on a present value of new business premium basis. Operating ROE stands for operating return on shareholders' allocated equity and is as operating profit after tax attributable to shareholders of the Company, expressed as a percentage of the simple average of opening and closing shareholders' allocated equity. Operating ROEV stands for operating return on EV and is calculated as EV operating profit, expressed as a percentage of the opening embedded value. Shareholders' allocated equity is total equity attributable to shareholders of the Company less fair value reserve. Tata AIA Life refers to Tata AIA Life Insurance Company Limited. TWPI consists of 100% of renewal premiums, 100% of first year premiums and 10% of single premiums, before reinsurance ceded. VONB for the Group is after unallocated Group Office expenses and the adjustment to reflect consolidated reserving and capital requirements. The total reported VONB for the Group in 2020 and 2019 exclude VONB attributable to non-controlling interests of $24m and $32m respectively. VONB and VONB margin by distribution channel are based on local statutory reserving and capital requirements, before the deduction of unallocated Group Office expenses and non- controlling interests and exclude pension business. VONB and VONB margin by product mix and geographical market are based on local statutory reserving and capital requirements, before the deduction of unallocated Group Office expenses and non-controlling interests. VONB includes pension business. ANP and VONB margin exclude pension business and are before deduction of non-controlling interests. ■ VONB margin is calculated as VONB divided by ANP. VONB for the margin calculations excludes pension business and is before deduction of non-controlling interests to be consistent with the definition of ANP. 44

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