PDF version of this press release - Royal and Sun Alliance

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to the action you should take, you are recommended to seek your own
financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other
independent financial adviser authorised under the Financial Services and Markets Act 2000.
If you have sold or otherwise transferred all your Ordinary Shares in the Company, please forward this
document, together with the accompanying documents, at once to the purchaser or transferee or to the
bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the
purchaser or transferee.
ROYAL & SUN ALLIANCE INSURANCE GROUP PLC
(incorporated and registered in England and Wales with registered number 2339826)
Proposed Disposal of the US Operation
and
Notice of Extraordinary General Meeting
Notice of an Extraordinary General Meeting of the Company to be held at the offices of Slaughter
and May, One Bunhill Row, London EC1Y 8YY, at 9.30 a.m. on Wednesday, 1 November 2006 is
set out at the end of this document. A Form of Proxy for use at the Extraordinary General Meeting is
enclosed. Shareholders are asked to complete and return the enclosed Form of Proxy in accordance
with the instructions printed thereon to the Company’s Registrars, Lloyds TSB Registrars, The
Causeway, Worthing, West Sussex, BN99 6DW, as soon as possible and, in any event, so as to be
received by the Company’s Registrars by not later than 9.30 a.m. (UK time) on Monday,
30 October 2006. Alternatively, a proxy may also be appointed via the internet or, for CREST
members, by using the CREST electronic proxy appointment service. For further details see the notes to
the notice of the Extraordinary General Meeting. The appointment of a proxy will not preclude you
from attending the Extraordinary General Meeting and voting in person if you wish to do so.
JPMorgan Cazenove and Merrill Lynch International are each acting for the Company and no-one else
in connection with the Disposal and will not be responsible to any other person for providing the
protections afforded to their clients or for providing advice in relation to the Disposal.

Important Disclaimer
This document contains certain statements which may be forward-looking statements as defined in the
US Private Securities Litigation Reform Act of 1995. It contains or may contain forward-looking
statements and information relating to the Company’s financial condition, results of operations,
business, strategy and plans, and general industry outlook (including trends in results, prices, volumes,
operations, margins, overall market conditions, risk management and exchange rates) based on
currently available information. These statements are often, but not always, made through the use of
words or phrases such as ‘aim’, ‘is anticipated’, ‘believe’, ‘will continue’, ‘could’, ‘estimated’,
‘expect’, ‘intend’, ‘may’, ‘plan’, ‘seek’, ‘should’ or ‘will’ or the negative of these terms or similar
expressions. The specific forward-looking statements (if any) may cover, among other matters, the
Company’s strategy and operational objectives, financial results, capital positions, rewording of the
dollar denominated subordinated debt, restructuring plans, cost improvement programme, completion
of disposals, establishment of technical provisions, losses related to the US financial enhancement
products, capital and solvency requirements in the UK, regulatory position in the US, prior year
adverse development in the US, effect of adverse court decisions on the Company’s financial positions,
provisions for ultimate cost of asbestos and environmental claims, adverse claims development on long
tail business and claims dependent on court judgements. Such statements are inherently subject to
certain risks and uncertainties. Actual future results and trends could differ materially from those set
forth in such statements due to various factors. Such factors include general economic conditions,
including in particular economic conditions in the United Kingdom; political and social conditions; the
frequency, severity and development of insured loss events, including catastrophes and man made
disasters; the availability and pricing of, and ability to collect on, reinsurance; the ability to exclude
and to reinsure the risk of loss from terrorism; policy renewal and lapse rates; fluctuations in interest
and inflation rates; returns on and fluctuations in the value of the Company’s investment portfolios;
corporate bankruptcies; fluctuations in foreign currency exchange rates; the ability of the Company’s
subsidiaries to pay dividends; a downgrade in the Company’s financial strength or claims paying or
other credit ratings; adverse changes in laws and regulations; adverse outcomes in judicial decisions
and rulings, the ability to satisfy conditions to closing of any disposal or acquisition transaction and
general competitive factors, and other risks and uncertainties. Because these and other factors could
cause actual results and outcomes to differ materially from those expressed in any forward-looking
statements made by us, you should not place undue reliance on any of these forward-looking
statements. Further any forward-looking statement speaks only as of the date on which it is made and
the Company undertakes no obligation to update or revise any of the forward-looking statement to
reflect events or circumstances after the date on which the statement is made or to reflect the
occurrence of unanticipated events save in respect of any requirement under applicable law or
regulation or the Listing Rules. New factors emerge from time to time, and it is not possible for the
Company to predict what will arise. In addition, the Company cannot assess the impact of each factor
on its business or the extent to which any factor, or combination of factors, may cause actual results to
differ materially from those described in any forward-looking statement.
2

CONTENTS
Page
Definitions...................................................................................................... 4
PART I Letter from the Chairman ....................................................................... 6
PART II Financial Information on the Core Group and the US Operation ......................... 11
PART III Pro Forma Financial Information .............................................................. 12
PART IV Terms of the Disposal ........................................................................... 14
PART V Additional Information .......................................................................... 18
Notice of Extraordinary General Meeting ................................................................. 29
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
All times shown in this document are London time unless otherwise stated.
Event 2006
Latest time for receipt of Forms of Proxy from
Shareholders
Extraordinary General Meeting to approve the Disposal
9.30 a.m. on Monday, 30 October
9.30 a.m. on Wednesday, 1 November
Target for completion of the Disposal By the end of 2006
3

DEFINITIONS
‘‘$’’ or ‘‘US$’’ US Dollars
‘‘£’’ or ‘‘Sterling’’ UK Sterling
‘‘Act’’
the Companies Act 1985 (as amended)
‘‘ADC’’
has the meaning given to it on page 8 of this document
‘‘ADR’’
an American depositary receipt evidencing title to one or more
American depositary share(s). One ADR represents five Ordinary
Shares.
‘‘Arrowpoint General
Partnership’’
‘‘Board’’ or ‘‘Directors’’
‘‘Company’’
‘‘Company LOC’’
‘‘Completion’’
‘‘Conditions’’
‘‘Core Group’’
‘‘CREST’’
‘‘CREST Regulations’’
‘‘DDI’’
‘‘Disposal’’
‘‘Extraordinary General
Meeting’’ or ‘‘EGM’’
Arrowpoint General Partnership, a Delaware general partnership and
a wholly-owned indirect US subsidiary of the Company
the directors of the Company
Royal & Sun Alliance Insurance Group plc (company number
2339826) with its registered office at 9th Floor, One Plantation
Place, 30 Fenchurch Street, London EC3M 3BD
has the meaning given to it on page 8 of this document
completion of the Disposal in accordance with the terms of the
Purchase Agreement as set out in Part IV of this document
has the meaning given to it in Part IV of this document
the Company’s UK, Scandinavian, International and Group Re
operations
the relevant system, as defined in the CREST Regulations (in respect
of which CRESTCo. Limited is operator as defined in the CREST
Regulations)
the Uncertificated Securities Regulations 2001 (SI 2001/3755) as
amended
the Delaware Department of Insurance
the proposed disposal of the US Operation as more particularly
described in this document
the extraordinary general meeting of the Company convened by the
notice which is set out at the end of this document to be held at the
offices of Slaughter and May, 1 Bunhill Row, London EC1Y 8YY on
Wednesday, 1 November 2006, at 9.30 a.m., or any reconvened
meeting following any adjournment thereof
‘‘Form of Proxy’’
the form of proxy accompanying this document for use by
Shareholders, in connection with the Extraordinary General Meeting
‘‘FSA’’
the Financial Services Authority
‘‘Globe’’ The Globe Insurance Company Limited (company number 2805658)
whose registered office is at St. Mark’s Court, Chart Way, Horsham,
West Sussex RH12 1XL
‘‘Governmental Entity
Approvals’’
‘‘Group’’
‘‘HSR Act’’
has the meaning given to it in paragraph 2 of Part IV to this
document
the Company and its subsidiary undertakings and, where the context
permits, each of them
the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended
4

‘‘IFRS’’
‘‘Listing Rules’’
‘‘Noteholder’’
‘‘Notes’’
‘‘Ordinary Shares’’
‘‘Purchase Agreement’’
‘‘Purchaser’’ or ‘‘Arrowpoint
Capital’’
‘‘R&SA US’’
‘‘Registrars’’
‘‘Related Party’’ or
‘‘Related Parties’’
‘‘Remaining Group’’
‘‘RGI’’
‘‘Rights Issue’’
‘‘Royal Indemnity’’
‘‘RSAI plc’’
‘‘Seller’’ and ‘‘Sellers’’
‘‘Shareholders’’
‘‘UK GAAP’’
‘‘UK Listing Authority’’
‘‘UK’’
‘‘US’’
International Financial Reporting Standards
the Listing Rules made by the UK Listing Authority under Part VI of
the Financial Services and Markets Act 2000
the Group or the holder of the Notes from time to time
has the meaning given to it in paragraph 5 of Part I of this document
ordinary shares of 27.5 pence each in the capital of the Company
the agreement between the Sellers and the Purchaser for the sale and
purchase of the US Operation dated 28 September 2006
Arrowpoint Capital Corp. and, its wholly owned
subsidiary, Arrowpoint Capital LLC
Royal & Sun Alliance USA, Inc. a Delaware corporation
Lloyds TSB Registrars of The Causeway, Worthing, West Sussex
BN99 6DA
the US Directors and the Purchaser (or any of them)
the Group following Completion
Royal Group, Inc., a Delaware Corporation
the Company’s one for one rights issue as detailed in the prospectus
issued by the Company dated 4 September 2003
Royal Indemnity Company, a US subsidiary of the Company
Royal & Sun Alliance Insurance plc (company number 93792) with
its registered office at St. Mark’s Court, Chart Way, Horsham, West
Sussex RH12 1XL
RSA Overseas Holdings (No. 1) and RSA Overseas Holdings (No.
2), each a ‘‘Seller’’ and, together, the ‘‘Sellers’’
the holders of Ordinary Shares in the Company
United Kingdom Generally Accepted Accounting Principles
the FSA acting in its capacity as the competent authority for the
purpose of Part VI of the Financial Services and Markets Act 2000
the United Kingdom of Great Britain and Northern Ireland
the United States of America, its territories and possessions, any
state of the United States, and the district of Columbia
‘‘US Directors’’ Sean A. Beatty, Dennis W. Cahill, Catherine A. Carlino, Michael J.
Crall, David M. Davenport, Robert J. Dixon, Julie A. Fortune,
Daniel R. Keddie, Marc-Andre Lefevbre, James F. Meehan, Edward
J. Muhl, David D. Shumway, Larry G. Simmons and John Tighe
‘‘US Operation’’
Arrowpoint and its subsidiaries and subsidiary undertakings
‘‘US Regulated Entities’’ Royal Indemnity Company; Security Insurance Company of
Hartford; Guaranty National Insurance Company; and Royal
Sunplus Lines Insurance Company.
5

PART I
LETTER FROM THE CHAIRMAN OF ROYAL AND SUN ALLIANCE
INSURANCE GROUP PLC
(Incorporated in England and Wales under the Companies Act 1985 with registered number 2339826)
John Napier
Andy Haste
George Culmer
Bridget McIntyre
David Paige
Noel Harwerth
Malcolm Le May
Edward Lea
John Maxwell
Chairman
Group CEO
Chief Financial Officer
UK Chief Executive
Group Risk Director
Non Executive Director
Non Executive Director
Non Executive Director
Non Executive Director
Registered Office:
9th Floor, One Plantation Place
30 Fenchurch Street
London EC3M 3BD
16 October 2006
To holders of Ordinary Shares and, for information purposes only, to participants in employee share
schemes.
Dear Shareholder,
PROPOSED DISPOSAL OF THE US OPERATION
1. INTRODUCTION
On 28 September 2006, Royal & Sun Alliance Insurance Group plc announced that it intended to
dispose of its US Operation to Arrowpoint Capital Corp. and its wholly owned subsidiary Arrowpoint
Capital LLC (collectively the ‘‘Purchaser’’), vehicles set up by the R&SA US management team. The
Disposal is a related party transaction and under the UK Listing Rules requires the approval of
Shareholders at an Extraordinary General Meeting of the Company. The Disposal is also conditional
upon, amongst other things, the approval of the appropriate regulators.
This document sets out the terms of the Disposal, the process for regulatory approval and the proposal
requiring Shareholder approval. This Shareholder approval is being sought at an Extraordinary General
Meeting of the Company which will be held at the offices of Slaughter and May, One Bunhill Row,
London EC1Y 8YY at 9.30 a.m. (UK time) on Wednesday, 1 November 2006. The text of the proposal
and the notice of the Extraordinary General Meeting are set out at the end of this document.
2. BACKGROUND TO AND REASONS FOR THE DISPOSAL
At the time of the Rights Issue in September 2003, the Group announced that the US Operation was
strategically non core. The US Operation was essentially closed to new business and a restructuring
plan instigated with the objective of bringing certainty and finality to the Group’s exposure to the US
Operation. In the last three years the Group has taken significant action to deliver this objective and the
Directors have considered a range of options including, but not limited to, restructuring arrangements
and sale to various third parties.
The structure of this transaction brings certainty and finality to the Group’s exposure to the US
Operation. The Directors believe this represents a good deal for shareholders. It delivers on the
objective of a clean exit from the Group’s exposure to the US Operation since the nature of the Group’s
ongoing relationships are clearly articulated. These do not represent a material risk and further
information on these is disclosed in Part IV of this document.
6

3. INFORMATION ON THE US OPERATION
The Group has had businesses in the US for 155 years writing property and casualty business for both
personal and commercial customers. At its largest, the US Operation wrote premiums of over
US$3 billion across a number of product lines including personal auto and household, commercial
property, packages, auto and workers compensation as well as some specialist products such as
financial enhancement products including collateralised debt obligations, credit enhancement products
and residual value contracts. The US Operation also wrote excess and surplus lines liability risks. The
US Operation has consistently delivered poor financial results and over the last ten years has made
cumulative underwriting losses of £2.7 billion with the losses predominantly driven by adverse claims
development.
As noted above, in 2003 the US Operation was identified as strategically non core and a clear objective
was set of bringing certainty and finality to the Group’s exposure to the US Operation. A new US senior
management team was appointed with a combination of insurance knowledge and run off expertise.
This team has successfully stabilised this business through a range of actions including:
s reducing headcount from 6,300 to under 700 and cutting operating expenses by 76%;
s
s
settling 130,000 open claims and reducing claims liabilities by nearly US$2 billion to just
under US$3 billion; and
negotiating the number of regulated entities from 27 down to four and reducing the number of
domicile regulators from 12 to one.
The Group has continually reported that risks and uncertainties remain in the US. These risks include
exposure to asbestos and workers compensation claims and a number of ongoing litigation cases.
Details of these risks and exposures, as reported in the Group’s interim report for the six months ended
30 June 2006, are set out in the estimation techniques, uncertainties and contingencies in Part V of this
document.
The US Operation currently employs 692 people (as at 30 June 2006) who will transfer to Arrowpoint
Capital as part of this transaction. The US Operation is principally based at the head office in Charlotte,
North Carolina with smaller offices in Farmington, Connecticut and other locations throughout the
United States.
An unaudited consolidated income statement analysed between the Core Group and the US Operation
for the six months ended 30 June 2006 is set out in Part II of this document.
The US Operation made a loss after tax of £17 million for the six months ended 30 June 2006. This
compares with a loss after tax of £30 million for the 12 months ended 31 December 2005 and a loss
after tax of £392 million for the 12 months ended 31 December 2004. The unaudited operating loss
information has been extracted from the unaudited results of the Company without material adjustment.
The net assets of the US Operation being sold were £322 million as at 30 June 2006 and £433 million as
at 31 December 2005. The gross assets were £4,528 million as at 30 June 2006 and £5,594 million as at
31 December 2005. The gross and net asset information has been extracted from the Group’s
consolidation schedules without material adjustment.
4. INFORMATION ON THE PURCHASER
Arrowpoint Capital Corp. is a company newly formed and owned by R&SA US senior management
(including the US Directors) and outside directors. Arrowpoint Capital will be led by John Tighe, CEO
and President, who has 25 years of experience in the insurance business.
5. TERMS OF THE DISPOSAL
Under the terms of the Purchase Agreement, the Group has agreed to dispose of the US Operation to the
Purchaser for deferred consideration in the form of non-interest bearing subordinate notes with an
aggregate principal amount of US$300 million (£160 million) (the ‘‘Notes’’). It is intended that the
7

present value of the deferred consideration will be held as part of the general investment portfolio of the
Company. The present value of the deferred consideration has been calculated to reflect Arrowpoint
Capital’s projected performance, and in turn, timing for any payments. The terms of the Notes are set
out in Part IV of this document.
On receipt of shareholder and regulatory approvals and with Completion, the Group will make a
US$287.5 million (£151 million) capital contribution into the US Regulated Entities.
The Group has given Arrowpoint Capital limited representations and warranties, all of which are
customary in a transaction of this kind.
Following Completion, several existing support arrangements will remain in place, including the
aggregate excess of loss reinsurance agreement (the ‘‘ADC’’) and a letter of credit (the ‘‘Company
LOC’’). The ADC is a reinsurance arrangement set up between the Group and the US Operation in
2003 whereby the Group has reinsured certain policy losses of the US Operation. The ADC attaches
when paid losses exceed US$4.01 billion and covers up to a maximum of an additional
US$1.225 billion. The ADC is at its policy limit and is therefore not subject to further insurance
risk. Furthermore, it is supported by collateral through a combination of funds withheld in trust and
through a letter of credit. A potential timing risk exists in the event that the payment of claims under the
ADC become due to the US Operation before sufficient resources exist within the funds withheld
account. In this event there would be a charge against the Group’s net assets. However the Directors
believe that the ADC does not represent a material risk to the Group given its nature, timing and
likelihood.
In 2003, the Company LOC was established between the Group and the US Operation in support of
certain third party reinsurance recoverables, which under US statutory accounting rules would not be
admitted as an asset of the US Operation for regulatory capital purposes. The collateral provided by the
Company LOC allows the recoverables to be admitted for regulatory capital purposes. The Company
LOC cannot in any event exceed US$150 million. The recoverables covered by the Company LOC,
which are subject to adjustment, presently stand at US$145 million and at the time of writing this
document the Company LOC had not been drawn down against. The Purchase Agreement provides that
after two years following Completion, the Company LOC will thereafter be able to be reduced by up to
US$50 million per year as long as any reduction does not cause the risk based capital ratio of Royal
Indemnity to drop below 300%. If the Company LOC is drawn against, an amount equal to any such
drawdown will be added to the Notes. In this event, up to US$100 million will be repaid to the Group
on a priority basis in advance of any dividend payment by Arrowpoint Capital. Further details on these
arrangements are set out in Part IV of this document.
The Disposal is conditional upon, amongst other things, receipt of the required Governmental Entity
Approvals in the United States and Bermuda, without any limitation or condition being imposed. The
Group is targeting Completion by year end 2006 and further details on the regulatory process are set out
in Part IV of this document. The Purchase Agreement also contains certain other customary conditions
to Completion, including, without limitation, the approval of the Purchase Agreement and the
transactions contemplated thereby by the Shareholders at the Extraordinary General Meeting. If
Shareholder and regulatory approvals are not received the Disposal cannot complete.
Further details of the terms of the Disposal are set out in Part IV of this document.
6. FINANCIAL EFFECTS OF THE DISPOSAL
The Group is selling the US Operation to Arrowpoint Capital for a deferred consideration of £160
million (US$300 million). The deferred consideration will be funded from the future performance of
the US Operation through dividends paid by the US Regulated Entities to Arrowpoint Capital. In the
table on page 9, the deferred consideration is discounted to its present value to reflect the fact that it is
dependent upon Arrowpoint Capital’s future performance and that any payments are subject to
regulatory approval. Therefore the final consideration received may be different to the total deferred
consideration of £160 million as described above. The transaction is conditional upon, inter alia,
8

shareholder and regulatory approvals. On receipt of these approvals and with Completion, the Group
will make a £151 million (US$287.5 million) capital contribution into the US Regulated Entities. The
net capital contribution, write off of net assets and other related costs result in an estimated pre tax loss
on disposal of £443 million. This is subject to an adjustment based on the net assets as at Completion
and foreign exchange fluctuations.
The table below details the estimated pre tax loss on disposal.
£m £m
Net assets as at 30 June 2006 (322)
Capital contribution (151)
Present value of deferred consideration 70
Net contribution (81)
Transaction and other costs (including the legal fees of Arrowpoint Capital) (29)
Foreign exchange previously taken to reserves (11)
Estimated pre tax loss on disposal (443)
A pro forma statement of the net assets of the Remaining Group has been prepared for illustrative
purposes only to show the effect of the disposal as if it had occurred at 30 June 2006. This statement is
set out in Part III of this document.
7. USE OF PROCEEDS
As part of the transaction there is deferred consideration of US$300 million (£160 million), in the form
of the Notes, payable dependant on the future financial performance of Arrowpoint Capital. The present
value of the deferred consideration will be held as part of the general investment portfolio of the Group.
The net consideration, based on £160 million (US$300 million) of deferred consideration and the
£151 million (US$287.5 million) capital contribution, is £9 million.
8. RELATED PARTY TRANSACTION
Arrowpoint Capital Corp. is an entity formed and owned by, inter alia, the US Directors and which in
turn owns 100% of Arrowpoint Capital LLC. The US Directors and the Purchaser are each related
parties of the Company and the Disposal therefore constitutes a related party transaction for the
purposes of the Listing Rules. Each US Director is a related party by virtue of being a director of one or
more subsidiaries (of the Company) which form part of the US Operation. The Purchaser is a Related
Party by virtue of the fact that it is an associate of each of the US Directors who are, in aggregate, able
to exercise or control the exercise of 30% or more of the votes able to be cast on all, or substantively
all, matters at general meetings of the Purchaser. As a related party transaction, the Disposal is of
sufficient size relative to the size of the Group that the approval of Shareholders is required before
Completion can occur. The approval of Shareholders is therefore being sought for the Disposal at an
Extraordinary General Meeting of the Company to be held at the offices of Slaughter and May, One
Bunhill Row, London, EC1Y 8YY on Wednesday, 1 November 2006 at 9.30 a.m.
To the extent any Related Party holds shares in the Company, such party will abstain from voting at the
Extraordinary General Meeting and the Related Parties have taken all reasonable steps to ensure that
their associates also abstain from voting at the Extraordinary General Meeting.
Further information on the Related Parties involved in the Disposal is set out in Part V of this
document.
9. EXTRAORDINARY GENERAL MEETING
You will find at the end of this document a formal notice convening the Extraordinary General Meeting
of the Company to be held at 9.30 a.m. (UK time) on Wednesday, 1 November 2006.
9

10. ACTION TO BE TAKEN BY YOU
It is important that you complete and sign the enclosed Form of Proxy in accordance with the
instructions printed thereon and return it to the Company’s Registrars so as to be received as soon as
possible and, in any event, not later than 9.30 a.m. (UK time) on Monday, 30 October 2006.
The completion and return of the Form of Proxy will not preclude you from attending the meeting and
voting in person, if you so wish.
Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST
sponsors regarding the action to be taken in connection with this document.
11. RECOMMENDATION
Your Board, having been so advised by each of JPMorgan Cazenove and Merrill Lynch
International, considers that the terms of the Disposal are fair and reasonable as far as
Shareholders as a whole are concerned. In providing this financial advice to the Board, each of
JPMorgan Cazenove and Merrill Lynch International have taken account of the Board’s
commercial assessment of the Disposal.
The Board believes that the Disposal is in the best interests of Shareholders as a whole. The Board
accordingly unanimously recommends Shareholders to vote in favour of the resolution to be
proposed at the Extraordinary General Meeting.
Yours faithfully,
John Napier
Chairman
10

PART II
FINANCIAL INFORMATION ON THE CORE GROUP AND THE US OPERATION
The following is a summary unaudited consolidated income statement analysed between the Core
Group and the US Operation on a management basis for the six month period from 1 January 2006 to
30 June 2006 and has been extracted without material adjustment from the Group’s interim results for
the six months ended 30 June 2006.
2006
Core
Group
US
Operation Group
£m £m £m
Net written premiums 2,833 (1) 2,832
Underwriting result 171 (43) 128
Investment income 262 55 317
Realised gains 33 4 37
Unrealised gains/(losses), impairments and foreign exchange 19 – 19
Unwind of discount (21) (10) (31)
Investment result 293 49 342
Insurance result 464 6 470
Other activities (48) (13) (61)
Operating result 416 (7) 409
Interest costs (48) – (48)
Amortisation (7) (2) (9)
Reorganisation costs (14) (5) (19)
Profit/(loss) before disposals and pension scheme changes 347 (14) 333
(Loss)/profit on disposals (1) (3) (4)
Profit/(loss) before tax 346 (17) 329
Taxation (91) – (91)
Profit/(loss) after tax 255 (17) 238
11

PART III
PRO FORMA FINANCIAL INFORMATION
The following is an unaudited pro forma statement of consolidated net assets of the Group, prepared in
accordance with the notes set out below. The unaudited pro forma statement of consolidated net assets
has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical
situation and, therefore, does not represent the actual financial position or results of the Group
following the Disposal. Its purpose is to illustrate the effect on the consolidated net assets of the Group
as if the Disposal had been effected on 30 June 2006.
The consolidated net assets of the Group at 30 June 2006 have been extracted, without material
adjustment, from the unaudited consolidated interim results of the Group for the six months ended
30 June 2006. The consolidated net assets of the US Operation at 30 June 2006 have been extracted,
without material adjustment, from the unaudited consolidation schedules used to prepare the unaudited
consolidated results of the Group for the six months ended 30 June 2006.
The proceeds of the Disposal receivable by the Company are described in paragraphs 5 and 6 of Part I
of this document.
12

Summary Consolidated Balance Sheet
Total Group
as at
30 June 2006
Adjustments
US Operation
as at
30 June 2006
Other
Adjustments
Pro forma
Remaining
Group
£m £m £m £m
Assets
Goodwill and other intangible assets 479 (13) – 466
Property and equipment 383 (4) – 379
Investment property 451 – – 451
Investment in associated undertakings 27 – – 27
Financial assets
Equity securities 1,568 (47) – 1,521
Debt and fixed income securities 10,995 (1,860) 70 (3) 9,205
Other 239 (14) – 225
Total financial assets 12,802 (1,921) 70 10,951
Reinsurers’ share of insurance contract liabilities 3,617 (2,040) 485 (4) 2,062
Insurance and reinsurance debtors 2,513 (315) 404 (4) 2,602
Deferred acquisition costs 465 (7) – 458
Other debtors and other assets 980 (83) 12 (6) 909
Cash and cash equivalents 1,564 (146) (180) (5) 1,238
23,281 (4,528) 791 19,544
Non current assets held for sale – – – –
Total assets 23,281 (4,528) 791 19,544
Equity, reserves and liabilities
Equity and reserves
Shareholders’ funds 2,920 (322) (130) (8) 2,468
Minority interests 379 – – 379
Total equity and reserves 3,299 (322) (130) 2,847
Liabilities
Loan capital 1,127 – – 1,127
Insurance contract liabilities 16,259 (3,286) 485 (4) 13,457
Insurance and reinsurance liabilities 439 (256) – 183
Borrowings 6 – – 6
Provisions and other liabilities 2,151 (664) 436 (4)(6) 1,923
Total liabilities 19,982 (4,206) 921 16,696
Total equity, reserves and liabilities 23,281 (4,528) 791 19,544
Footnotes:
(1) The consolidated net assets of the Group have been extracted from the unaudited interim results of the Group for the period ended 30 June
2006.
(2) The consolidated net assets of the US Operation at 30 June 2006 have been extracted from consolidation schedules used to prepare the
interim financial information for the Group for the period ended 30 June 2006.
(3) The pro forma financial information has been adjusted to take into account the consideration in the form of US$300 million subordinated
notes which form the proceeds of the Disposal receivable by the Remaining Group. As a financial instrument the subordinated notes are
required to be fair valued; a fair value of £70 million has been placed upon the financial instrument.
(4) The pro forma financial information has been adjusted to take into account the impact of the ADC contract which currently eliminates on
group consolidation but which will form part of the assets and liabilities of the Remaining Group.
(5) The pro forma financial information has been adjusted to take into account:
(a) the capital contribution of £151 million (US$287.5 million) in cash; and
(b) transaction and other costs of £29 million (including the legal fees of Arrowpoint Capital).
(6) The pro forma financial information has been adjusted to take into account:
(a) reinstatement of an intercompany balance of £12 million between the Remaining Group and the US Operation which is currently
eliminated; and
(b) a taxation liability arising for the Remaining Group of £20 million relating to foreign exchange movements previously taken into
reserves and certain centrally held provisions for reinsurance recoverables.
(7) No adjustment has been made to take account of trading or changes in the financial position of the Group since 30 June 2006.
(8) The adjustment to Shareholders’ funds reflects the estimated loss on Disposal including a £20 million taxation liability partially offset by
foreign exchange previously taken to reserves.
13

PART IV
TERMS OF THE DISPOSAL
1. Parties
The Purchase Agreement was entered into on 28 September 2006 between the Purchaser, the Sellers
and Globe for the disposal of the US Operation. Globe is party to the Purchase Agreement as guarantor
of the performance of the Sellers’ obligations in its capacity as immediate parent company of the
Sellers. The Disposal is to be effected by the sale and purchase of the partnership interests in
Arrowpoint General Partnership, the ultimate US holding entity for the US Operation.
2. Conditionality
Completion of the Disposal contemplated by the Purchase Agreement is subject to regulatory approval
in, and/or notifications required by, the State of Delaware and Bermuda (the ‘‘Governmental Entity
Approvals’’). One of the Governmental Entity Approvals requires the Purchaser to file an acquisition
of control filing (the ‘‘Application’’) for approval by the Delaware Department of Insurance (the
‘‘DDI’’). After receiving the Application, the DDI will hold a public hearing to determine whether the
Purchaser meets the statutory standards necessary for approval of the Application. It is important to
note that there is considerable discretion as to how the review process is handled by the DDI. It is
expected that the review process will be completed within two to three months. However, there is a risk
that this process could be delayed.
The Purchase Agreement also contains, among others, the following customary conditions to
Completion:
(a)
(b)
(c)
(d)
approval of the Purchase Agreement and the transaction by Shareholders at the EGM;
termination or expiration of any pre-closing waiting period applicable to the consummation of
the Disposal under the HSR Act;
no proceeding having been instituted in the United States to terminate any pension or other
retirement plan relating to the US Operation; and
no statute, rule, decree, order, injunction or other prohibition under applicable law or regulation
which prohibits, restricts or makes illegal the Completion or any material transactions
contemplated by the Purchase Agreement having been enacted or enforced by any
governmental entity.
3. Consideration
The consideration payable to the Sellers comprises non-interest bearing subordinate notes of the
Purchaser with an aggregate principal amount of US$300 million (£160 million) (the ‘‘Notes’’) subject
to adjustment in certain circumstances. The Notes will remain outstanding until repaid in full.
s
s
s
Payments on the Notes are dependent on dividends being paid by the US insurance
subsidiaries. No such dividends may be paid any earlier than the fourth anniversary of
Completion.
The Purchaser is required to use 50% of any dividends payable from the Royal Indemnity
insurance pool companies (net of any funds used to satisfy tax or other obligations) to make
payments to the Sellers in redemption of the Notes, provided that the repayment of amounts
drawn down against the Company LOC and certain indemnification obligations under the
Purchase Agreement are payable to the Sellers as a priority payment in advance of any funds
being used to make any dividend or similar payment on the Purchaser’s equity, subject to a
maximum amount of US$100 million. Dividends are not expected to be paid any earlier than
the fourth anniversary of the Completion Date.
The Notes will provide for covenants in favour of the Noteholder, including (but not limited
to):
14

(a)
(b)
(c)
(d)
(e)
(f)
the right of the Noteholder to receive: (i) periodic financial information; and (ii) access
to books and records of the Purchaser and the US Operation as reasonably required to
monitor the Purchaser’s obligations under the Notes;
the consent of the Noteholder to: (i) any sale or, in certain circumstances set forth in
the Notes, acquisition of, any equity interests in any of the US Operation by the
Purchaser; or (ii) the sale of all, or any, significant portion of the assets of the US
Operation;
prior regulatory approval for any sale of any assets of the US Operation, or acquisition
of assets by the US Operation, up to and including the fourth anniversary date of
Completion (other than transactions undertaken in the ordinary course of business and
in other limited exceptions set forth in the Notes);
a limitation on the ability of the US Operation to enter into affiliated party transactions
(other than for compensation of officers and directors and certain other exceptions set
forth in the Notes);
a limitation on payments to holders of equity of the Purchaser if the Purchaser is not
current on its payment obligations under the Notes; and
an obligation to seek to cause the US subsidiaries that are insurance companies to
declare dividends after the fourth anniversary, so long as such dividends are consistent
with commitments, made by the Purchaser to the regulators, and in the reasonable
judgment of the relevant board of directors, would not materially adversely impact the
ability of any such entity to satisfy, or be imprudent in light of, such entity’s potential
future obligations to policyholders.
4. Representations, warranties and indemnities
Under the Purchase Agreement, the Sellers have made certain limited representations and warranties,
concerning, among other things, their authority to enter into the Purchase Agreement, the US Operation
and their ownership of the partnership interests of Arrowpoint General Partnership. These
representations and warranties are subject to certain disclosures. The Purchaser has also made
certain customary representations and warranties pursuant to the terms of the Purchase Agreement.
These representations and warranties are subject to certain disclosures.
Each of the Purchaser and the Sellers has agreed to indemnify the other party for losses arising from
breaches of their representations, warranties and covenants under the Purchase Agreement. The
representations and warranties of each of the Purchaser and Sellers survive Completion for a period of
18 months.
The indemnification obligations of the Sellers and the Purchaser for losses arising from breaches of
their respective representations and warranties are limited to US$50 million in aggregate and a
minimum threshold of US$100,000 per loss. Apart from the Purchaser’s and the Sellers’ indemnity for
breaches of their respective representations and warranties, the indemnities of the parties are not limited
in time or amount.
5. Capital contribution
With Completion the Group will make a capital contribution of US$287.5 million (£151 million) into
the US Regulated Entities.
6. Continuation of existing support arrangements by the Core Group to the US Operation
after Completion
The Group has a number of historical financial and contractual arrangements with the US Operation,
which will need to remain in place post Completion, but which will be amended as a result of the
Disposal. These existing agreements include, among others:
15

(a) The ADC reinsurance arrangement set up between the Group and the US Operation in 2003
whereby the Group has reinsured certain policy losses of the US Operation. The ADC attaches
when paid losses exceed US$4.01 billion and covers up to a maximum of an additional
US$1.225 billion. The ADC is at its policy limit and is therefore not subject to further
insurance risk. Furthermore, it is supported by collateral through a combination of funds
withheld in trust and through a letter of credit.
In the pro forma for the Remaining Group (set out in Part III of this document) the ADC has
been treated as a third party arrangement and the appropriate amounts have been reflected in
the class test calculations under the Listing Rules.
A potential timing risk exists in the event that the payment of claims under the ADC become
due to the US Operation before sufficient resources exist within the funds withheld account. In
this event there would be a charge against the Group’s net assets. However the Directors
believe that the ADC does not represent a material risk to the Group given its nature, timing
and likelihood.
Certain amendments were made to the contract to recognise the effects of the transaction,
which included a separation provision that the Group would not terminate the ADC as a result
of the change of control contemplated by the transaction.
(b)
The Company LOC was provided by the Group in 2003 in support of certain third party
reinsurance recoverables of the US Operation. The US Operation entered into contracts with
other reinsurers to reinsure certain policies and claims upon those contracts. Under US
statutory accounting rules, recoverables from certain third party reinsurers would not be
admitted as an asset of the US Operation for regulatory capital purposes. The collateral
provided by the Company LOC allows the recoverables to be admitted for regulatory capital
purposes. The Company LOC may also, in certain circumstances, cover recoverables from
authorised reinsurers that become unauthorised.
The Company LOC cannot in any event exceed US$150 million and the recoverables covered
by the Company LOC presently stand at US$145 million. At the time of writing this document
the Company LOC had not been drawn down against. The Purchase Agreement provides that
after two years following Completion the Company LOC will thereafter be able to be reduced
by up to US$50 million per year as long as any reduction does not cause the risk based capital
ratio of Royal Indemnity to drop below 300%. If the Company LOC is drawn against, an
amount equal to any such drawdown will be added to the Notes. In this event, up to US$100
million will be repaid to the Group on a priority basis in advance of any dividend payment by
Arrowpoint Capital.
7. Continuation of support arrangements provided by the US Operation to the Group after
Completion
The Group has a number of financial and contractual arrangements with the US Operation in relation to
business written by the Core Group where the clients have business based in the US. These have been
entered into in the ordinary course of business and will continue after disposal of the US Operation.
Details of these include those set out below:
(a)
Quota share reinsurance agreements relating to multinational business of the Core Group
Multinational clients are a key business segment of the Core Group and the provision of
insurance programmes for such clients requires placement of local covers in relevant markets
across the world. The US Operation has in the past underwritten the US local covers of these
clients as an accommodation facility for the Group, reinsuring them back to the central
insurance programme. In these cases, the Group supports the reinsurance obligations by a letter
of credit from the Group’s main insurance entity, RSAI plc, again to enable the reinsurance to
be allowed for US statutory accounting purposes. This letter of credit cannot in any event
exceed US$200 million but currently stands at US$139.9 million and would be expected to
16

educe over time as liabilities for this business run off. These collateral arrangements will also
cover reinsurance obligations of Intrepid Re, an entity 38.5% owned by the Group, to the extent
that Intrepid Re fails to provide adequate collateral.
(b)
Aviation pool reinsurance agreement
RSAI plc previously participated in an aviation and aerospace underwriting pool which
entailed the insurance of certain clients across the world. The US Operation has in the past
underwritten the US covers of these clients as an accommodation facility for the Group,
reinsuring them back to the Group, which in turn supports the reinsurance obligations by a
letter of credit from RSAI plc, again to enable the reinsurance to be allowed for US statutory
accounting purposes. This letter of credit (currently in the amount of US$11.5 million) is
subject to adjustment from time to time based on the amount of such reinsurance recoverables.
(c)
Two agreements which are being entered into independently of the Disposal, between the US
Operation and Group’s managing general agency in the US
These agreements relate to the servicing of claims arising from the US local covers of the
Group’s multinational clients which were, in the past, underwritten by the US insurance
subsidiaries on behalf of the Group.
The Group’s obligations under the pre-existing agreements discussed in paragraph 6 and 7 are not
affected materially by the Disposal.
8. Ancillary agreements
The Purchaser and the Sellers have agreed in the Purchase Agreement to enter into certain ancillary
agreements relating, inter alia, to transitional services and trade marks.
9. Miscellaneous
The Purchase Agreement contains customary provisions allowing each party to terminate the Purchase
Agreement under certain circumstances. In the event of termination, the Purchase Agreement provides
that neither party shall have any liabilities or obligations to the other party except as specifically
provided therein.
17

PART V
ADDITIONAL INFORMATION
1. Company Details
The Company is domiciled in the United Kingdom with its registered office at 9th Floor, One
Plantation Place, 30 Fenchurch Street, London EC3M 3BD. The telephone number of the Company’s
registered office is 020 7111 7000.
2. Interest of Related Parties
2.1 Sean A. Beatty, Dennis W. Cahill, Catherine A. Carlino, Michael J. Crall, David M. Davenport,
Robert J. Dixon, Julie A. Fortune, Daniel R. Keddie, Marc-Andre Lefevbre, James F. Meehan,
Edward J. Muhl, David D. Shumway, Larry G. Simmons and John Tighe are each a related
party by virtue of each of them being a director of one or more subsidiaries of the Company,
which form part of the US Operation. The Purchaser is a related party by virtue of the fact that
it is an associate of each of the individuals named above who are, in aggregate, able to exercise
or control the exercise of 30% or more of the votes able to be cast on all, or substantially all,
matters at general meetings of the Purchaser.
2.2 As at 5 October 2006 (being the latest practicable date prior to the publication of this
document), the interests (all of which are beneficial unless otherwise stated) of the Related
Parties which:
(i)
have been notified by each Related Party to the Company pursuant to section 324 or
328 of the Act; or
(ii) are required to be entered in the register maintained by the Company under section 325
of the Act; or
(iii)
are interests of a connected person of a Related Party which would, if the connected
person were a director, be required to be disclosed under (i) or (ii) above and the
existence of which is known to or could with reasonable diligence be ascertained by
Related Party, are as follows:
Number of
ADRs (1)
Interest in ADRs
under Employee
Stock Discount
Plan (1)
Percentage of
issued Ordinary
Share capital
Options held
under Employee
Incentive Scheme
(ADRs)
Sean A. Beatty (2) 0 0 0 151,940
Dennis W. Cahill (2) 907 0 Less than 0.01 159,286
Catherine A. Carlino (2) 1,185 0 Less than 0.01 62,742
Michael J. Crall 12,000 0 Less than 0.01 0
David M. Davenport (2) 0 0 0 25,956
Robert J. Dixon (2) 0 1,176 Less than 0.01 77,625
Julie A. Fortune (2) 0 0 0 120,000
Daniel R. Keddie (2) 0 1,815 Less than 0.01 33,636
Marc-Andre Lefevbre (2) 0 925 Less than 0.01 109,728
James F. Meehan 0 0 0 40,000
Edward J. Muhl 0 0 0 0
Dave D. Shumway (2) 1,582 0 Less than 0.01 36,396
Larry G. Simmons 0 0 0 11,911
John Tighe (2) 4,156 6,204 Less than 0.01 380,880
(1) Some of the holdings include a fraction of an ADR. Where applicable, this has been rounded to the nearest whole
ADR.
(2) In addition to the shares shown in the table above, these individuals each invest in a 401k Savings and Investment
Plan. Under this plan they are interested in a unitised stock fund consisting of shares in the Company. As at 30
September 2006 the aggregate value of the fund held by these individuals had a market value of $129,294 and
equated to 46,365 ordinary shares (or 9,273 ADRs).
2.3 Save as disclosed in paragraph 2.2 above, none of the Related Parties has any interest,
beneficial or non-beneficial, in the share capital of the Company or any of its subsidiaries.
18

3. US Directors’ service contracts and remuneration
3.1 The following US Directors have service contracts with Royal Indemnity on the following
terms:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
Sean A. Beatty entered into a service contract dated 1 October 2003. His current basic
salary is US$380,000 per annum;
Dennis W. Cahill entered into a service contract dated 1 October 2003. His current
basic salary is US$380,000 per annum;
Robert J. Dixon entered into a service contract dated 1 October 2003. His current basic
salary is US$216,000 per annum;
Julie A. Fortune entered into a service contract dated 8 March 2004. Her current basic
salary is US$345,000 per annum;
Marc-Andre Lefebvre entered into a service contract dated 13 February 2004. His
current basic salary is US$322,500 per annum;
James F. Meehan entered into a service contract dated 10 January 2005. His current
basic salary is US$300,000 per annum;
David D. Shumway entered into a service contract dated 10 January 2005. His current
basic salary is US$288,660 per annum; and
John Tighe entered into a service contract dated 1 January 2003, (as amended and
restated by a new service contract dated 1 October 2003). His current basic salary is
US$504,000 per annum.
Each of these service contracts is terminable immediately upon notice from Royal
Indemnity for the misconduct of a US Director, and otherwise upon not less than 30 days’
notice from the relevant US Director or Royal Indemnity, as the case may be.
Under the terms of his service contract, where Royal Indemnity terminates his
employment, other than for misconduct, John Tighe is entitled to receive 18 months’ basic
salary, a payment equal to the average of the annual incentive bonuses paid to him for the prior
two annual incentive bonus years and on-going medical benefits (as provided to current
employees) for an 18 month period.
Under the terms of their service contracts, where Royal Indemnity terminates their
employment, other than for misconduct, Sean A. Beatty, Dennis W. Cahill, Robert J. Dixon,
Julie A. Fortune, Marc-Andre Lefebvre, James F. Meehan and David D. Shumway are each
entitled to receive 12 months’ basic salary, the annual incentive bonus that would have been
payable to that US Director under the terms of his current target bonus percentage and on-going
medical benefits (as provided to current employees) for a 12 month period.
Other than accrued but unpaid salary, bonus and any other benefits, no termination benefits are
due where the service contract is terminated voluntarily by the US Director, or terminated by
Royal Indemnity due to the misconduct of the US Director.
3.2 The following US Directors have severance agreements with Royal Indemnity:
(i)
(ii)
Catherine A. Carlino entered into a severance agreement dated 15 April 2004. Her
current basic salary is US$202,860 per annum;
David M. Davenport entered into a severance agreement dated 19 September 2006. His
current basic salary is US$191,000 per annum; and
19

(iii)
Daniel R. Keddie entered into a severance agreement dated 29 March 2005. His current
basic salary is US$215,000 per annum.
Both Royal Indemnity and the relevant US Director have the right to terminate the
US Director’s employment, with or without notice, at any time and for any reason. The
severance agreements provide that where the employment of the US Director is terminated by
Royal Indemnity without cause (but not otherwise), the US Director is entitled to receive
payment of 12 months’ base salary, payable in 26 bi-weekly payments.
3.3 The following US Directors have letters of appointment with R&SA US, on the following
terms:
(i)
(ii)
(iii)
Michael J. Crall was appointed as a non-executive director with effect from
23 February 2005. He was appointed chairman of the board on 17 May 2006 and as
chairman of the audit committee with effect from 23 February 2005. He is entitled to a
fee of US$200,000;
Edward J. Muhl was appointed as a non-executive director of the board and as a
member of the compensation committee with effect from 23 January 2006. He is
entitled to a fee of US$100,000; and
Larry G. Simmons was appointed as a non-executive director with effect from
17 February 2004. He was appointed chairman of the compensation committee with
effect from 1 September 2004. He is entitled to a fee of US$75,000.
None of the letters of appointment provide for benefits upon termination.
3.4 Save for the agreements referred to in paragraphs 3.1, 3.2 and 3.3 above, there are no existing
service contracts between any Related Party and any member of the Group which provide for
benefits upon termination of employment.
4. Related Party Transactions with US Directors under IFRS reporting
4.1 Save as disclosed in paragraph 4.2, for the period 1 January 2003 to 30 September 2006, the
Company has not entered into any related party transactions (which for these purposes are
those set out in the standards adopted according to the Regulation (EC) No 1606/2002) with
any Related Party.
4.2 For the purposes of IFRS, the Company has a related party relationship with John Tighe (being
a member of key management). During the period 1 January 2003 to 30 September 2006,
John Tighe received total remuneration of US$4,132,015 under his service contract with Royal
Indemnity. In addition, John Tighe, his close family and friends and entities under his control,
have general insurance, health and welfare benefits with subsidiary companies of the Group.
Such policies are on normal commercial terms except that John Tighe is entitled to special rates
which are also available to other members of staff.
5. Major Interest in Shares
Set out in the table below are the names of those persons who, insofar as is known to the Company, are
interested, directly or indirectly in three per cent. or more of the Company’s issued share capital as at
5 October 2006 (being the latest practicable date prior to the publication of this document):
Shareholder
Number of
Ordinary Shares
Percentage of
issued Ordinary
Share capital
Legal & General Group plc 96,101,934 3.25
Barclays Bank plc 89,239,632 3.01
20

6. Material Contracts
With the exception of the Purchase Agreement (the principal terms of which are summarised in Part IV
of this document), no contracts have been entered into (other than contracts entered into in the ordinary
course of business) by any member of the Group either: (i) within a period of two years immediately
preceding the date of this document which are or may be material to the Group; or (ii) which contain
any provisions under which any member of the Group has any obligation or entitlement which is, or
may be, material to the Group as at the date of this document, and in each case, which Shareholders
would reasonably require information on to make a properly informed decision on how to vote at the
EGM.
7. Estimation Techniques, Uncertainties and Contingencies
As set out in the 2006 Interim Report of the Company for the six month period ended 30 June 2006, the
following is a summary of the way in which estimation techniques, uncertainties and contingencies can
affect the financial statements of insurance companies and the Group in particular.
7.1 Introduction
One of the purposes of insurance is to enable policyholders to protect themselves against
uncertain future events. Insurance companies accept the transfer of uncertainty from
policyholders and seek to add value through the aggregation and management of these risks.
The uncertainty inherent in insurance is inevitably reflected in the financial statements of
insurance companies. The uncertainty in the financial statements principally arises in respect of
the insurance liabilities of the company.
The insurance liabilities of an insurance company include the provision for unearned premiums
and unexpired risks and the provision for outstanding claims. Unearned premiums and
unexpired risks represent the amount of income set aside by the company to cover the cost of
claims that may arise during the unexpired period of risk of insurance policies in force at the
balance sheet date. Outstanding claims represents the company’s estimate of the cost of
settlement of claims that have occurred by the balance sheet date but have not yet been finally
settled.
In addition to the inherent uncertainty of having to make provision for future events, there is
also considerable uncertainty as regards the eventual outcome of the claims that have occurred
by the balance sheet date but remain unsettled. This includes claims that may have occurred but
have not yet been notified to the company and those that are not yet apparent to the insured.
As a consequence of this uncertainty, the insurance company needs to apply sophisticated
estimation techniques to determine the appropriate provisions.
7.2 Estimation techniques
Claims and unexpired risks provisions are determined based upon previous claims experience,
knowledge of events and the terms and conditions of the relevant policies and on interpretation
of circumstances. Particularly relevant is experience with similar cases and historical claims
payment trends. The approach also includes the consideration of the development of loss
payment trends, the levels of unpaid claims, legislative changes, judicial decisions and
economic conditions.
Where possible the Group adopts multiple techniques to estimate the required level of
provisions. This assists in giving greater understanding of the trends inherent in the data being
projected. The Group’s estimates of losses and loss expenses are reached after a review of
several commonly accepted actuarial projection methodologies and a number of different bases
to determine these provisions. These include methods based upon the following:
s
the development of previously settled claims, where payments to date are extrapolated
for each prior year;
21

s
s
s
estimates based upon a projection of claims numbers and average cost;
notified claims development, where notified claims to date for each year are
extrapolated based upon observed development of earlier years; and
expected loss ratios.
In addition, the Group uses other methods such as the Bornhuetter-Ferguson method, which
combines features of the above methods. The Group also uses bespoke methods for specialist
classes of business. In selecting its best estimate, the Group considers the appropriateness of
the methods and bases to the individual circumstances of the provision class and underwriting
year. The process is designed to select the most appropriate best estimate.
Large claims impacting each relevant business class are generally assessed separately, being
measured either at the face value of the loss adjusters’ estimates or projected separately in
order to allow for the future development of large claims.
Provisions are calculated gross of any reinsurance recoveries. A separate estimate is made of
the amounts that will be recoverable from reinsurers based upon the gross provisions and
having due regard to collectability.
The claims provisions are subject to close scrutiny both within the Group’s business units and
at Group Corporate Centre. In addition, for major classes where the risks and uncertainties
inherent in the provisions are greatest, regular and ad hoc detailed reviews are undertaken by
advisers who are able to draw upon their specialist expertise and a broader knowledge of
current industry trends in claims development. As an example, the Group’s exposure to
asbestos and environmental pollution is examined on this basis. The results of these reviews are
considered when establishing the appropriate levels of provisions for outstanding claims and
unexpired periods of risk.
It should be emphasised that the estimation techniques for the determination of insurance
liabilities involve obtaining corroborative evidence from as wide a range of sources as possible
and combining these to form the overall estimate. This technique means that the estimate is
inevitably deterministic rather than stochastic. A stochastic valuation approach, whereby a
range of possible outcomes is estimated and probabilities assigned thereto, is only possible in a
limited number of situations.
The pension assets and pension and post retirement liabilities are calculated in accordance with
International Accounting Standard 19 (IAS 19). The assets, liabilities and income statement
charge, calculated in accordance with IAS 19, are sensitive to the assumptions made, including
inflation, interest rate, investment return and mortality. IAS 19 compares, at a given date, the
current market value of a pensions fund’s assets with its long term liabilities, which are
calculated using a discount rate in line with yields on ‘AA’ rated bonds of suitable duration and
currency. As such, the financial position of a pension fund on this basis is highly sensitive to
changes in bond rates and equity markets.
7.3 Uncertainties and contingencies
The uncertainty arising under insurance contracts may be characterised under a number of
specific headings, such as:
s
s
s
uncertainty as to whether an event has occurred which would give rise to a
policyholder suffering an insured loss;
uncertainty as to the extent of policy coverage and limits applicable;
uncertainty as to the amount of insured loss suffered by a policyholder as a result of the
event occurring; and
22

s
uncertainty over the timing of a settlement to a policyholder for a loss suffered.
The degree of uncertainty will vary by policy class according to the characteristics of the
insured risks and the cost of a claim will be determined by the actual loss suffered by the
policyholder.
There may be significant reporting lags between the occurrence of the insured event and the
time it is actually reported to the Group. Following the identification and notification of an
insured loss, there may still be uncertainty as to the magnitude and timing of the settlement of
the claim. There are many factors that will determine the level of uncertainty such as inflation,
inconsistent judicial interpretations and court judgments that broaden policy coverage beyond
the intent of the original insurance, legislative changes and claims handling procedures.
The establishment of insurance liabilities is an inherently uncertain process and, as a
consequence of this uncertainty, the eventual cost of settlement of outstanding claims and
unexpired risks can vary substantially from the initial estimates, particularly for the Group’s
long tail lines of business. The Group seeks to provide appropriate levels of claims provision
and provision for unexpired risks taking the known facts and experience into account.
The Group has exposures to risks in each class of business within each operating segment that
may develop and that could have a material impact upon the Group’s financial position. The
geographical and insurance risk diversity within the Group’s portfolio of issued insurance
policies make it not possible to predict whether material development will occur and, if it does
occur, the location and the timing of such an occurrence. The estimation of insurance liabilities
involves the use of judgments and assumptions that are specific to the insurance risks within
each territory and the particular type of insurance risk covered. The diversity of the insurance
risks results in it not being possible to identify individual judgments and assumptions that are
more likely than others to have a material impact on the future development of the insurance
liabilities.
The sections below identify a number of specific risks relating to asbestos and environmental
claims and to insurance risks remaining within the Group’s discontinuing US operations. There
may be other classes of risk which could develop in the future and that could have a material
impact on the Group’s financial position.
The Group evaluates the concentration of exposures to individual and cumulative insurance
risk and establishes its reinsurance policy to reduce such exposure to levels acceptable to the
Group.
7.4 Asbestos and environmental claims
The estimation of the provisions for the ultimate cost of claims for asbestos and environmental
pollution is subject to a range of uncertainties that is generally greater than those encountered
for other classes of insurance business. As a result it is not possible to determine the future
development of asbestos and environmental claims with the same degree of reliability as with
other types of claims, particularly in periods when theories of law are in flux. Consequently,
traditional techniques for estimating claims provisions cannot wholly be relied upon and the
Group employs specialised techniques to determine provisions using the extensive knowledge
of both internal asbestos and environmental pollution experts and external legal and
professional advisors.
Factors contributing to this higher degree of uncertainty include:
s
plaintiffs’ expanding theories of liability, compounded by inconsistent court decisions
and judicial interpretations;
23

s
s
s
s
s
s
s
s
a few large claims, accompanied by a very large number of small claims or claims
made with no subsequent payment, often driven by intensive advertising by lawyers
seeking claimants;
the tendency for speculative, inflated and/or unsupported claims to be made to insurers,
with the aim of securing a settlement on advantageous terms;
the long delay in reporting claims and exposures, since the onset of illness and
disability arising from exposure to harmful conditions may only become apparent
many years later (for example, cases of mesothelioma can have a latent period of up to
40 years);
inadequate development patterns;
difficult issues of allocation of responsibility among potentially responsible parties and
insurers;
complex technical issues that may give rise to delays in notification arising from
unresolved legal issues on policy coverage and the identity of the insureds;
the tendency for social trends and factors to influence jury verdicts; and
developments pertaining to the Group’s ability to recover reinsurance for claims of this
nature.
Further information on specific developments in the US in relation to asbestos and
environmental claims is discussed below.
7.5 Representations and warranties
In the course of disposal of businesses the Group provides representations and warranties to
counterparties in contracts in connection with various transactions and may also provide
indemnifications that protect the counterparties to the contracts in the event that certain
liabilities arise (covering such matters as tax, property, environmental issues, etc). While such
representations, warranties and indemnities are essential components of many contractual
relationships, they do not represent the underlying purpose for the transaction. These clauses
are customary in such contracts and may from time to time lead to us receiving claims from
counterparties.
7.6 Financial enhancement products
In the UK and US, the Group has exposures to financial enhancement products, which provide
surety to banks, lending institutions and credit facilities that insure principal and interest
repayment on debt securities. The Group no longer writes such business; however, the nature of
such contracts is normally that the Group is on risk for more than one year and therefore
liabilities remain for an extended period. Further information on financial enhancement
products in the US is discussed below.
7.7 Litigation, mediation and arbitration
The Group, in common with the insurance industry in general, is subject to litigation,
mediation and arbitration, and regulatory, governmental and other sectoral inquiries in the
normal course of its business. The Directors do not believe that any current mediation,
arbitration, regulatory, governmental or sectoral inquiries and pending or threatened litigation
or dispute, as outlined elsewhere in this note, will have a material adverse effect on the Group’s
financial position, although there can be no assurance that losses resulting from any pending
mediation, arbitration, regulatory, governmental or sectoral inquiries and threatened litigation
or dispute will not materially affect the Group’s financial position or cash flows for any period.
Further information on US litigation is discussed below.
24

7.8 Reinsurance
The Group is exposed to disputes on, and defects in, contracts with its reinsurers and the
possibility of default by its reinsurers. The Group is also exposed to the credit risk assumed in
fronting arrangements. In selecting the reinsurers with whom we do business our strategy is to
seek reinsurers with the best combination of credit rating, price and capacity. We publish
internally a list of authorised reinsurers who pass our selection process and which our
operations may use for new transactions.
The Group monitors the financial strength of its reinsurers, including those to whom risks are
no longer ceded. Allowance is made in the financial position for non recoverability due to
reinsurer default by requiring operations to provide, in line with Group standards, having
regard to companies on the Group’s ‘Watch List’. The ‘Watch List’ is the list of companies
whom the Directors believe will not be able to pay amounts due to the Group in full.
7.9 Changes in foreign exchange rates may impact our results
We publish our consolidated financial statements in pounds sterling. Therefore, fluctuations in
exchange rates used to translate other currencies, particularly other European currencies and
the US dollar, into pounds sterling will impact our reported consolidated financial condition,
results of operations and cash flows from period to period. These fluctuations in exchange rates
will also impact the pound sterling value of our investments and the return on our investments.
Income and expenses for each income statement item are translated at average exchange rates.
Balance sheet assets and liabilities are translated at the closing exchange rates at the balance
sheet date.
7.10 Investment risk
The Group is exposed to credit risk on its invested assets. Credit risk includes the non
performance of contractual payment obligations on invested assets and adverse changes in the
credit worthiness of invested assets including exposures to issuers or counterparties for bonds,
equities, deposits and derivatives. The Group’s insurance investment portfolios are
concentrated in listed securities. The Group uses derivative financial instruments to reduce
its exposure to adverse fluctuations in interest rates, foreign exchange rates and equity markets.
The Group has strict controls over the use of derivative instruments.
7.11 Rating agencies
The ability of the Group to write certain types of insurance business is dependent on the
maintenance of the appropriate credit ratings from the rating agencies. The Group has the
objective of maintaining single ‘A’ ratings. At the present time the ratings are ‘A–’ from S&P
and ‘A–’ from AM Best. Any worsening in the ratings would have an adverse impact on the
ability of the Group to write certain types of general insurance business.
7.12 Regulatory environment
The regulatory environment is subject to significant change in many of the jurisdictions in
which the Group operates. The Group continues to monitor the developments and react
accordingly. The Directors are confident that the Group will continue to meet all future
regulatory capital requirements.
In addition, the Group is continuing to monitor and respond to consultation on the latest
Solvency II proposals, which are intended, in the medium term, to achieve greater
harmonisation of approach across European member states to assessing capital resources and
requirements.
7.13 US Operation
In addition to the disclosures above, there are a number of specific risks and issues pertaining to
the US Operation as follows:
25

7.13.1 Asbestos and environmental claims
In respect of asbestos and environmental claims the position in the US is particularly
problematic, as plaintiffs have expanded their focus to defendants beyond the ‘traditional’
asbestos manufacturers and distributors. This has arisen as a consequence of the increase in the
number of insureds seeking bankruptcy protection because of asbestos related litigation and the
exhaustion of their policy limits. Plaintiffs, supported by lawyers remunerated on a contingent
fee basis, are now seeking to draw in a wide cross section of defendants who previously only
had peripheral or secondary involvement in asbestos litigation. This may include companies
which have distributed or incorporated asbestos containing parts in their products or operated
premises where asbestos was present. There are also increasing signs of attempts to reopen and
reclassify into other insurance coverages previously settled claims, and the filing of claims
under the non aggregate premises or operations section of general liability policies. There are
also indications that plaintiffs may seek damages by asserting that insurers had a duty to protect
the public from the dangers of asbestos.
Although the prospects of some form of asbestos reform, including a no fault Trust Fund, have
substantially diminished, the risk remains of reform progressing in a way that does not ensure
finality and allows claims to be brought by individuals who have failed to establish genuine
medical criteria.
Against this background and in common with the industry generally, the Group in the US
receives notifications and approaches from, and on behalf of, insureds who previously had
peripheral or secondary involvement in asbestos litigation indicating that they may be seeking
coverage under Group policies. Given the uncertainties outlined above as to the potential of
loss suffered, the availability of coverage and the often long delay in reporting these issues it is
difficult to predict the outcome of these notifications and approaches. The greatest difficulty is
with estimating whether the Group has any liability as many of these are discharged at no cost
to the Group or have been settled below the quantum sought, although there can be no certainty
that this will always be the case. It is clear that there is unlikely to be any firm direction in case
law or legislation which would allow for these issues to be resolved satisfactorily in the near
term and no likelihood of the plaintiffs’ bar in the US easing its aggressive stance with
litigation. Management, therefore, expect that these notifications and approaches will continue
to be received for some time to come. One such approach received during 2004 from General
Motors Corporation is now the subject of ongoing litigation.
7.13.2 Financial enhancement products
Within the financial enhancement portfolio of Financial Structures Limited, a subsidiary of
Arrowpoint General Partnership, there are a variety of financial enhancement product
exposures including collateralised debt obligations (CDO), credit enhancement and residual
value insurance contracts. These products are no longer written.
During February 2006, one of the remaining two contracts was terminated for a net pre tax gain
of US$4 million. The fair value of the remaining contract at 30 June 2006 was a liability of
US$71 million, compared with a liability of US$75 million at 31 December 2005.
7.13.3 Litigation
As discussed above, in the normal course of its business the Group is subject to litigation,
mediation and arbitration, and regulatory and other sectoral inquiries, which in turn may give
rise to threatened litigation or disputes. This is particularly so in respect of its US Operation
where there are a number of ongoing litigations. The status of two major US litigations is as
follows:
7.13.4 Student Finance Corporation
In early 2002, issues arose in connection with a series of credit risk insurance policies covering
loans made to students in various post secondary trade schools, primarily truck driving schools.
26

The original loan portfolio had a face value of approximately US$501 million. In mid July
2002, Royal Indemnity filed lawsuits in Texas state court seeking, among other things,
rescission of these policies in response to a systematic pattern of alleged fraud,
misrepresentation and cover up by various parties, which among other things concealed the
default rate of the loans. Since Royal Indemnity’s lawsuits seek rescission of these policies, all
the Group’s financial accounting entries associated with the transactions have been reversed.
The ultimate outcome of the suits is uncertain.
The foregoing rescission actions gave rise to other related lawsuits filed in Delaware by MBIA
Insurance Corporation (‘MBIA’) and various banks, seeking to enforce the Royal Indemnity
credit risk insurance policies. Plaintiffs in the Delaware actions included Wells Fargo Bank
Minnesota, NA (‘Wells Fargo’), in its capacity as trustee of a number of securitisations that
were collateralised by student loans, and MBIA which insured the obligations issued through
these securitisations. These actions were heard in US District Court, District of Delaware.
Plaintiffs in the Delaware actions moved for summary judgement. The Court granted summary
judgement to MBIA and Wells Fargo on 30 September 2003.
Royal Indemnity appealed each of these judgements. PNC Bank and Wilmington Trust agreed
to discontinue their parts of the legal action following agreed settlements; only the
MBIA/Wells Fargo judgement remains open. With respect to the MBIA/Wells Fargo
judgement, on 3 October 2005, the Court of Appeals upheld the District Court’s ruling that
Royal Indemnity had waived its right to rescind its policies based on Student Finance
Corporation’s fraud and that the policies therefore remain in force. However, the Court of
Appeals also concluded that Royal Indemnity raised a triable issue as to whether all of the
losses claimed by MBIA/Wells Fargo are covered by those policies. As a result, the Court
overturned the remainder of the summary judgement and returned the case to the District Court
to determine whether all of the claims asserted against the Royal Indemnity policies fall within
the scope of coverage provided by the policies. The case is now before the District Court and
discovery is underway.
At 30 June 2006, the claims asserted by MBIA/Wells Fargo totalled US$353.5 million. To the
extent that the District Court determines that claims fall outside the scope of the Royal
Indemnity policies, they would be excluded from any judgement award. Interest on any
judgement award would also vary, depending upon the amount of any award.
The ultimate outcome of these lawsuits is necessarily uncertain. Any loss on the loan portfolio
will be reduced to the extent of reinsurance available to Royal Indemnity, recoveries from the
original borrowers on the defaulted loans, and reserves, if any. Any losses may be further offset
by recoveries from other third parties. To that end, Royal Indemnity is actively pursuing
recovery actions against certain trucking school entities and professional advisers. However,
there can be no assurance that the outcome of these lawsuits, the availability of reinsurance
recoveries, the extent and amount of recoveries from the borrower under the respective loan
programmes and/or reserves, if any, among other factors, will be resolved in favour of Royal
Indemnity.
Based on current knowledge of the circumstances, legal advice received and the range of other
actions available to the Group to manage any insurance exposure, the Directors believe that the
resolution of the legal proceedings in respect of these credit risk insurance policies will not
have a material adverse effect on the Group’s financial position.
7.13.5 World Trade Center
The estimated cost of the insurance losses associated with the terrorist action of 11 September
2001 is a gross loss in excess of £1 billion, reduced to £280 million net of reinsurance. This was
an unprecedented event, which still has unresolved issues in respect of both the gross loss and
consequent extent of the reinsurance recoveries. The loss estimate has been prepared on the
basis of the information currently available as to the magnitude of the claims, including
27

usiness interruption losses. The final cost may be different from the current estimate due to the
uncertainty associated with ongoing appeals and the valuation and allocation process which is
currently underway in respect of the Twin Towers complex. Appraisal hearings are scheduled
to continue through July 2007. Nevertheless, the Directors believe their estimate of the gross
and net loss is appropriate based on the information available to them and that there will be no
material adverse effect on the Group’s financial position.
7.13.6 Restructuring Plans
The Group’s US restructuring plans are complex and are subject to particular risks. The Group’s
US subsidiaries are subject to government regulation in their state of domicile and also in each
of the jurisdictions in which they are licensed or authorised to do business. In the US, the
conduct of insurance business is regulated at the state level and not by the federal government
and the Group’s subsidiaries are subject to state supervision of their regulatory capital and
surplus positions.
8. Miscellaneous
8.1 There has been no significant change in the financial or trading position of the Group since
30 June 2006, being the end of the last financial period for which unaudited interim financial
statements of the Group have been published.
8.2 JPMorgan Cazenove and Merrill Lynch International are acting as joint sponsor and financial
advisor to the Company and have given and have not withdrawn their written consent to the
inclusion in this document of their name and the references to them in the form and context in
which they are included.
9. Documents available for inspection
Copies of the following documents will be available for inspection during normal business hours on
any weekday (Saturdays, Sundays and public holidays excepted) at the current registered office of the
Company at 9th Floor, One Plantation Place, 30 Fenchurch Street, London EC3M 3BD and at the
offices of Slaughter and May, One Bunhill Row, London EC1Y 8YY up to and including the
conclusion of the EGM on Wednesday, 1 November 2006:
(a)
(b)
(c)
(d)
(e)
the Purchase Agreement;
the memorandum and articles of association of the Company: (i) as they currently stand; and
(ii) inclusive of proposed amendments to be considered by Shareholders at an Extraordinary
General Meeting of the Company to be held on 26 October 2006 (for which a separate circular
was posted on 2 October 2006);
the audited consolidated accounts of the Company for each of the financial years ended
31 December 2004 and 31 December 2005 and the unaudited interim results for the period
ended 30 June 2006;
the written consents referred to in paragraph 8 above; and
this document.
Dated: 16 October 2006
28

ROYAL & SUN ALLIANCE INSURANCE GROUP PLC
(incorporated in England and Wales with registered number 2339826)
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of Royal & Sun Alliance
Insurance Group plc (the ‘‘Company’’) will be held at the offices of Slaughter and May, One Bunhill
Row, London, EC1Y 8YY on Wednesday, 1 November 2006 at 9.30 a.m. for the purpose of
considering and, if thought fit, passing the following resolution which will be proposed as an ordinary
resolution:
ORDINARY RESOLUTION
THAT the disposal of the US Operation to the Purchaser (the ‘‘Disposal’’)asmore particularly
described in the circular sent to shareholders of the Company dated 16 October 2006 (the ‘‘Circular’’)
on the terms and subject to the conditions of the purchase agreement dated 28 September 2006
(described in the Circular), and the ancillary actions and arrangements as described in the Circular, be
and are hereby approved and that the directors (or any duly constituted committee thereof) of the
Company be and are hereby authorised to take all such steps as may be necessary or appropriate in
relation thereto and to implement the same with such modifications, variations, revisions, waivers or
amendments (being modifications, variations, revisions, waivers or amendments which the directors or
any such committee consider reasonable and in the best interests of shareholders as a whole or which
are of a non-material nature) as the directors or any such committee may deem necessary, expedient or
appropriate.
Registered office:
By order of the Board
9th Floor, One Plantation Place
Mark Chambers
30 Fenchurch Street General Counsel and Group Company Secretary
London EC3M 3BD 16 October 2006
Notes:
1. Proxies
Holders of Ordinary Shares can appoint one or more other persons, known as proxies, to attend the meeting in their place and
to vote on their behalf in the event of a poll. A proxy need not be a member of the Company. A proxy cannot raise questions at
a meeting or vote on a show of hands. Shareholders who appoint proxies can nevertheless still attend the meeting and vote in
person (in which case their proxies’ votes will be invalidated).
To appoint one or more proxies, you will need to complete and return the enclosed Form of Proxy (unless you wish to register
your proxy appointment electronically, as detailed below). The Form of Proxy will be valid only if it is received by the
Company’s Registrars, Lloyds TSB Registrars, The Causeway, Worthing, West Sussex, BN99 6DW by no later than 9.30 a.m.
on Monday, 30 October 2006, accompanied by a Power of Attorney or any other authority under which the Form of Proxy is
signed (if required). A copy of any such Power of Attorney or authority, certified notarially or in accordance with the Powers
of Attorney Act 1971, will also be accepted as authority to sign the Form of Proxy. There are more details about how to
complete the Form of Proxy on the form itself.
2. Electronic proxy appointment through CREST
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so
for the EGM to be held on Wednesday, 1 November 2006 and any adjournments(s) thereof by using the procedures described
in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have
appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to
take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a
‘‘CREST Proxy Instruction’’) must be properly authenticated in accordance with CRESTCo’s specifications and must contain
the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it
constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy, must, in
order to be valid be transmitted so as to be received by the issuer’s agent (7RA01) by no later than 9.30 a.m. on Monday,
30 October 2006. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to
the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve the message by enquiry to
CREST in the manner prescribed by CREST. After this time any change of instruction to proxies appointed through CREST
should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that CRESTCo does
not make available special procedures in CREST for any particular messages. Normal system timings and limitations will
therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned
to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service
provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to
ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST
members and, where applicable, their CREST sponsors or voting service provider(s) are referred, in particular, to those
sections of the CREST Manual concerning practical limitations of the CREST system and timings.
29

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
3. Electronic voting through the Internet
You may, if you wish, register the appointment of a proxy electronically by logging on to the website www.sharevote.co.uk.
You will need your Reference Number (this is the 24-digit number printed below your name and address on the accompanying
Form of Proxy). Full details of the procedure are given on the website. Alternatively, if you have registered for a Shareview
portfolio, log on to your portfolio at www.shareview.co.uk and click on ‘‘Company Meetings’’. The proxy appointment and
instructions must be received by Lloyds TSB Registrars by no later than 9.30 a.m. on Monday, 30 October 2006. You can also
indicate your intention to attend the EGM on the website. Please note that any electronic communication that is found to
contain a computer virus will not be accepted.
The use of internet service in connection with the EGM is governed by Lloyds TSB Registrars’ conditions of use set out on the
website, www.sharevote.co.uk, which may be read by logging on to that site and entering the Reference Number printed on the
Form of Proxy.
4. Special requirements
The Company is committed to providing a quality service to all its shareholders. Please let us know if, for example, you would
like documentation to be provided to you in a special format. We will do our best to meet your needs. You can also write to
Lloyds TSB Registrars at the address given below.
5. Shareholder information
Registrars
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex BN99 6DA
The Company has appointed Lloyds TSB Registrars as its Registrars to manage the shareholder register, to ensure that all
information held about the Group’s shareholders is kept up to date and to pay dividends.
There is now a range of shareholder information on line at www.shareview.co.uk. Shareholders can check holdings and find
practical help on transferring shares or updating details and register their e-mail address to receive shareholder information
and Annual Report & Accounts electronically.
Registered Office
Royal & Sun Alliance Insurance Group plc
9th Floor
One Plantation Place
30 Fenchurch Street
London EC3M 3BD
Telephone: +44 (0) 20 7111 7000
www.royalsunalliance.com
The above Company is registered in England and Wales.
Registered No. 2339826.
How to get to the Extraordinary General Meeting
Slaughter and May
One Bunhill Row
London EC1Y 8YY
Telephone: +44 (0) 20 7090 5000
Please use the client entrance
The nearest underground stations and rail connections are Barbican, Liverpool Street and Moorgate.
30

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