Release date: 25 July 2006

Lloyds TSB Insurance, a subsidiary of Lloyds TSB Group, has acquired the new and existing general insurance business of Pearl Group.

The acquisition, which follows a competitive tender facilitated by Dresdner Kleinwort on behalf of Pearl Group, provides Lloyds TSB Insurance the rights to renew Pearl’s general insurance portfolio. Lloyds TSB will also have the right to market a range of general insurance products under the Pearl brand across the UK.

Jonathan Moss, Managing Director of Pearl, said: “We are convinced that this partnership will deliver value to both our policyholders and shareholders. The transaction demonstrates Pearl’s continued commitment to provide a comprehensive general insurance product range to our customers.”

Phil Loney, Managing Director, Lloyds TSB Insurance, said: “The corporate partnership market provides considerable opportunities within the general insurance arena and will support Lloyds TSB Insurance in the delivery of profitable sales growth through access to a wider customer base. With a strong track record in enhancing its manufacturing capabilities, Lloyds TSB Insurance is also well placed to maximise efficiencies from the combined operations.”

In acquiring Pearl’s general insurance business Lloyds TSB Insurance has further strengthened its leadership position in the home insurance market and in adding such a significant portfolio has extended its distribution capabilities within the retail sector. Lloyds TSB Insurance will provide home, motor, travel, commercial and mortgage insurance to Pearl Group customers under the Pearl, London Life and NPI brands.

The agreement with Pearl is the latest in Lloyds TSB Insurance’s expanding corporate partnerships portfolio which includes organisations such as AA, More Than, Goldfish and Argos Retail Group Financial Services.

Today’s announcement demonstrates Pearl Group’s dynamic management of its businesses, which in the last 12 months has seen Pearl;

• increase the Pearl policyholder Equity Backing Ratio from 25% to 45%
• enter into a new set of investment management agreements with Henderson Global Investors
• consolidate its operations onto one site in Peterborough and enter into a strategic business processes outsource agreement with Tata Consulting Services
• create a leading edge asset and risk management unit and
• instigate major programmes to ensure that Pearl is an industry leader in treating policyholders fairly in run-off
• grow its Embedded Value from £1.3billion to £2.1billion