SOURCE: Prudential plc

June 24, 2005 02:02 ET

PRUDENTIAL PLC ANNOUNCES PRU BUYS ANNUITIES BOOK

LONDON, UK -- (MARKET WIRE) -- June 24, 2005 --

PRUDENTIAL TO ACQUIRE PHOENIX LIFE & PENSIONS LIMITED'S ANNUITIES BOOK

Prudential and Resolution Life Group announced today that they have 
reached agreement for Prudential to acquire the portfolio of in-force 
pension annuities written in the with-profits fund of Resolution Life's 
subsidiary, Phoenix Life & Pensions Limited (PLP).  The book covers 
approximately 52,500 policies (weighted average age 73 with no deferred 
annuities) with assets of approximately £1.5 billion. The transaction is 
expected to generate premium income of around £145 million on an APE 
basis but the final number will only be known once various premium 
adjustments have been made over the course of the next six months.

PLP (previously known as Royal & Sun Alliance Life and Pensions Limited) 
was acquired by Resolution Life Group from Royal & Sun Alliance in 
September 2004. 

Under the terms of the agreement, Prudential will initially provide 
reassurance to PLP which will continue to pay the annuitants, with 
Prudential reimbursing the annuity payments to PLP. In due course, the 
intention is for the PLP book to transfer to Prudential under a Part VII 
scheme, at which point Prudential will take over direct responsibility 
for the payment of all annuitants. This transaction will not affect the 
terms of the annuity payments made to PLP's customers.

Mark Wood, Chief Executive, Prudential UK & Europe, said: "Prudential is a
market leader in annuities paying almost one million people each month.  
As a result of this transaction, PLP's annuitants will benefit from 
Prudential's vast experience in this market."

The capital required for this transaction will not alter the capital 
requirement for Prudential UK over the planning period of 2005 - 2007.

                                  -ENDS-

Enquiries to:

Media                                   Investors/Analysts

Prudential Group
Clare Staley             020 7548 3719  James Matthews     020 7548 3561
                                        Marina Novis       020 7548 3511
Prudential UK
Anthony Frost            020 7150 3001

Resolution Life
Ian Maidens              020 7489 4880
Alex Child-Villiers      07795 425580
Temple Bar Advisory


Notes to Editors:

1.   Prudential is a leading life and pensions provider to approximately 7
     million customers in the United Kingdom.  It has around 6,800 full-
     time staff, offices located in London, Reading, Belfast, Dublin and 
     Stirling, and a customer service centre in Mumbai.

     Products: Bulk and Individual Annuities, Corporate Pensions, With-
     Profits and Unit-Linked Bonds, Savings and Investments, Equity 
     Release, Healthcare and Protection.

     Distribution Channels: Direct to customers (telephone, internet and 
     mail), Independent Financial Advisers, Business to Business 
     (consulting actuaries and benefit advisers), and Partnerships 
     (affinities and banks).

2.   The UK annuity market has been one of the key drivers of the overall 
     life market during recent years.  The annuity market has been a 
     particular area of focus in Prudential's UK strategy in recent years 
     and today, Prudential is a leading provider of individual and bulk 
     annuities in the UK.

     Prudential has a large source of annuity business through maturing 
     pensions in its with-profits fund which, until recently, has been 
     written in Prudential's with-profits fund.  However, Prudential now 
     writes this business in its shareholder-backed business, Prudential 
     Retirement Income Limited.

     In addition, shareholder capital  is used to support the annuity 
     business written on behalf of other insurers. The agreements with 
     Zurich Financial Services, Pearl Assurance, St James' Place, Royal 
     London and National Australia Bank highlight Prudential's 
     capabilities in this area. Shareholder capital is also used to back 
     individual annuities obtained through customers from other insurers 
     exercising their Open Market Options.

3.   The mortality basis used to price this transaction is based on the
     current Prudential view of annuitant mortality, adjusted for any 
     known differences in the PLP portfolio based on the book's mortality 
     experience.

4.   Details of PLP book:

     Total number of policies                     Approximately 52,500
     % of policies male/female                    65%/35%
     Average age (weighted by benefit amount)     73.1
     Average age (unweighted)                     72.7
     Annual Payments (first life)                 £106 million

5.   Resolution Life Group has recently announced that it plans to merge 
     with Britannic Group Plc (Britannic) to form the UK's leading 
     consolidator of closed life funds. The merger is due to be completed 
     in Q3 2005, subject to the approval of Britannic's shareholders, and 
     the required regulatory clearances.

6.   Prudential (through M&G Investment Management) will have a 6.3 per 
     cent shareholding in Resolution Plc following the merger with 
     Britannic.

Prudential plc, a company incorporated and with its principal place of 
business in the United Kingdom, and its affiliated companies constitute 
one of the world's leading financial services groups. It provides 
insurance and financial services directly and through its subsidiaries 
and affiliates throughout the world. It has been in existence for over 
150 years and has £187bn in assets under management, as at 31 December
2004. Prudential plc is not affiliated in any manner with Prudential 
Financial, Inc, a company whose principal place of business is in the 
United States of America.

Forward-Looking Statements

This statement may contain certain "forward-looking statements" with
respect to certain of Prudential's plans and its current goals and 
expectations relating to its future financial condition, performance, 
results, strategy and objectives. Statements containing the 
words "believes", "intends",  "expects", "plans", " seeks" 
and "anticipates", and words of similar meaning, are forward-looking.  By
their nature, all forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances which are beyond
Prudential's control including among other things, UK domestic and global
economic and business conditions, market related risks such as 
fluctuations in interest rates and exchange rates, and the performance of 
financial markets generally; the policies and actions of regulatory 
authorities, the impact of competition, inflation, and deflation; 
experience in particular with regard to mortality and morbidity trends, 
lapse rates and policy renewal rates; the timing, impact and other 
uncertainties of future acquisitions or combinations within relevant 
industries; and the impact of changes in capital, solvency or accounting 
standards, and tax and other legislation and regulations in the 
jurisdictions in which Prudential and its affiliates operate. This may for
example result in changes to assumptions used for determining results of
operations or re-estimations of reserves for future policy benefits.  As a
result, Prudential's actual future financial condition, performance and 
results may differ materially from the plans, goals, and expectations set 
forth in Prudential's forward-looking statements. Prudential undertakes 
no obligation to update the forward-looking statements contained in this 
statement or any other forward-looking statements it may make.


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