With-Profits Bonus Declaration
February 2012

Dear Policyholder,

Another Positive Year

I am pleased to tell you that, despite a backdrop of market volatility and low interest rates, 2011 was another positive year for the Prudential With-Profits Fund. Although the economic situation has been and still remains very difficult, our investment experts have been able to build on the strong returns achieved in 2010.

Delivering on our Objective for the With-Profits Fund

Our objective is to look after the money you entrust to us and continue to deliver steady performance over the medium to long term. We have delivered a return of 17.6% over the past 5 years and 81.8% over the past 10 years, both net of tax. Over the course of 2011, we achieved a net return of 2.2% for the Fund. Please note that past performance is not a reliable indicator of future performance.

The With-Profits smoothing process

Our With-Profits Fund aims to offer some protection against the ups and downs of the market. We do this by smoothing the returns. This means we hold back some of the investment returns in good years to give us the scope to support bonus rates in years when the Fund does not perform as well. This year, for most policyholders, we have used this aspect of the smoothing process to help us add money to policies.

The Bonus Added to Your Policy

You receive your share of the Fund's performance by way of bonuses added to your policy. The return on your policy will be different to the overall return for the Fund I mentioned above. This is because of the effect of smoothing, tax and of charges.

The rate of bonus added will vary depending on the type of policy you have. The details of the impact this bonus declaration has had on your policy will be shown in your yearly statement.

Please note that, in some circumstances, we may apply a Market Value Reduction which will have the effect of reducing your fund value if you take money from your policy after a period of poor returns. This is done to ensure that no-one gets more than their fair share of the Fund and it is there to protect customers who stay invested in the Fund.

You're right to be with the Pru

Our objective remains unchanged. We will seek to maintain the security and long-term financial strength of our With-Profits Fund. We want to continue to deliver steady performance for you. I believe that Prudential's financial strength, the ability to smooth investment returns, the size and diversity of our Fund and the returns we have delivered make us stand out from the crowd.

Thank you for continuing to invest with us.

Yours faithfully,

Barry O'Dwyer
Deputy Chief Executive