Finance and Capital Management

Sources of earnings - Expected development¹ Key drivers of Adjusted Operating Profit Savings & Asset Management Asset Management . AuM & Flows: Market conditions difficult near term. Focused on medium-term growth initiatives Average fee margin: Pressure across industry especially on retail, mitigated by focus on value-added solutions Costs: Beneficial impact of transformation; expected investment in growth initiatives dependent on market conditions Heritage With-Profits • . Shareholder transfers expected to remain at around current levels on average for medium term With-Profits . Shareholder transfers continue to rise as PruFund AuMA grow and the book matures • Hedge result to remain a net cost under normal market ● conditions (actual outcome depends on market movements) • Other . Result from minor other businesses (including Prudential international branches) and service companies Expected to remain small in Group context Shareholder Annuities & other Return on excess assets and margin release expected to decline gradually over the long-term as book runs off. Low double-digit £m reduction expected in 2020 due to payment of dividend up to M&G plc at end 2019 Hedge result to remain a net cost under normal market conditions (actual outcome depends on market movements) • Annuity asset trading expected to remain positive, but at lower levels than previous years after bedding-down of Solvency II . Longevity remains uncertain: Prudent approach with continued focus on mortality trends; CMI17 already adopted at H1 stage for FY 2019 Corporate centre Head office expense Expected to be in the range of £80-100m p.a. Debt interest cost • Coupons on post-demerger debt of £3.2bn amount to c. £190m² p.a. 1. Assumes no abnormal developments in financial markets, major regulatory changes, or other unexpected external developments; 2. Based on USD/GBP exchange rate as of the 30 of June 2019 38

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