Obbligazione NNGroupe 9% ( XS0821168423 ) in EUR

NNGroupe

100 EUR ▲

Paesi Bassi

XS0821168423 ( in EUR )

9% per anno ( pagato 1 volta l'anno)

28/08/2042 - Obbligazione è scaduto

Prospetto opuscolo dell'obbligazione NN Group XS0821168423 in EUR 9%, scaduta

100 000 EUR

500 000 000 EUR

NN Group è una società di servizi finanziari internazionale focalizzata su assicurazioni sulla vita, pensioni e gestione patrimoniale.

The Obbligazione issued by NNGroupe ( Netherlands ) , in EUR, with the ISIN code XS0821168423, pays a coupon of 9% per year.
The coupons are paid 1 time per year and the Obbligazione maturity is 28/08/2042

Delta Ll'yd Levensverzekering N.V.
(inc%rp%rated with limited liability in Amsterdam, The Netherlands)
5500,000,000 Fixed t' Fl'ating Rate Sub'rdinated N'tes due 2042
The $500,000,000 Fixed t- Fl-ating Rate Sub-rdinated N-tes due 2042 (the N'tes) are issued by Delta Ll-yd Levensverzekering N.V. (the
Issuer). The den-minati-n -f the N-tes will be $100,000 and integral multiples -f $1,000 in excess there-f, up t- and including $199,000.
Applicati-n has been made by the Issuer t- The Netherlands Auth-rity f-r the Financial Markets (the AFM) in its capacity as c-mpetent
auth-rity under the Dutch Financial Supervisi-n Act (Wet %p het financieel t%ezicht (Wft)) relating t- pr-spectuses f-r securities, f-r the
appr-val -f this Pr-spectus f-r the purp-ses -f Directive 2003/71/EC (the Pr'spectus Directive). Applicati-n has als- been made by the
Issuer t- Eur-next Amsterdam N.V. (Eur'next) f-r the N-tes t- be listed -n NYSE Eur-next in Amsterdam (Eur'next Amsterdam).
References in this Pr-spectus t- the N-tes being "listed" (and all related references) shall mean that the N-tes have been listed and admitted
t- trading -n Eur-next Amsterdam. Eur-next Amsterdam is a regulated market f-r the purp-ses -f Directive 2004/39/EC -f the Eur-pean
Parliament and -f the C-uncil -n markets in financial instruments.
Up t- 29 August 2022 (the First Call Date), the N-tes bear a fixed rate -f interest -f 9.00 per cent. per annum, payable annually in arrear -n
29 August -f each calendar year (each a Fixed Interest Payment Date). If -n the First Call Date the N-tes will n-t have been redeemed in
full in acc-rdance with the terms and c-nditi-ns -f the N-tes (the Terms and C'nditi'ns), the N-tes will bear a fl-ating rate -f interest -f
Eurib-r f-r three m-nth dep-sits in eur- plus a margin -f 8.12 per cent. per annum payable quarterly in arrear -n 29 February (except in a
year that is n-t a leap year, in which case, -n 1 March -f such year), 29 May, 29 August and 29 N-vember in each year, f-r the first time -n
29 N-vember 2022 (each a Fl'ating Interest Payment Date and t-gether with each Fixed Interest Payment Date, each an Interest Payment
Date).
Subject t- the Terms and C-nditi-ns, the Issuer may -n any Opti-nal Interest Payment Date defer payment -f interest -n the N-tes which
w-uld -therwise be payable -n such date until the Maturity Date -r any earlier date -n which the N-tes are redeemed in full.
In additi-n t- the right -f the Issuer t- defer payment -f interest in acc-rdance with C-nditi-n 5(a)(i), payments in respect -f -r arising fr-m
(including any damages awarded f-r breach -f any -bligati-ns under) the N-tes may -nly be made pr-vided the Mandat-ry N-n-payment
C-nditi-n is n-t met at the time -f payment by the Issuer, and n- interest shall be due and payable in respect -f -r arising fr-m the N-tes
except t- the extent that the Mandat-ry N-n-payment C-nditi-n is n-t met and the Issuer c-uld make such payment with-ut the Mandat-ry
N-n-payment C-nditi-n being met, except where C-nditi-n 2 applies, in which case the h-lder shall have a sub-rdinated claim as set -ut
therein. Any interest in respect -f the N-tes n-t paid -n any Interest Payment Date, t-gether with any -ther interest in respect there-f n-t paid
-n any earlier Interest Payment Date, in each case by virtue -f C-nditi-n 5(a), shall, s- l-ng as the same remains unpaid, c-nstitute Arrears
'f Interest.
Arrears -f Interest, and any -ther am-unt, payment -f which is deferred in acc-rdance with C-nditi-n 5(a), may be paid in wh-le -r in part,
but subject t- the Mandat-ry N-n-payment C-nditi-n n-t being met at the time -f payment by the Issuer, at any time up-n the expiry -f n-t
less than 14 days' n-tice t- such effect given by the Issuer t- the h-lders -f the N-tes (the N'teh'lders), and in any event will aut-matically
bec-me immediately due and payable in wh-le up-n the -ccurrence -f certain events as described in C-nditi-n 5(b).
Unless the N-tes are previ-usly redeemed -r purchased and cancelled in full, the Issuer will redeem the N-tes at their principal am-unt,
t-gether with all Arrears -f Interest and interest accrued (if any) -n 29 August 2042 (the Maturity Date). S- l-ng as the Issuer is subject t-
Capital Adequacy Regulati-ns, any redempti-n pursuant t- C-nditi-n 6 may -nly be made pr-vided the Mandat-ry N-n-payment C-nditi-n
is n-t met at the time -f such redempti-n, and n- principal, premium, interest -r any -ther am-unt shall be due and payable in respect -f -r
arising fr-m the N-tes except t- the extent that the Mandat-ry N-n-payment C-nditi-n is n-t met and the Issuer c-uld make such payment
with-ut the Mandat-ry N-n-payment C-nditi-n being met, except where C-nditi-n 2 applies, in which case the h-lder shall have a
sub-rdinated claim as set -ut therein. Any c-nversi-n, exchange, substituti-n, variati-n -r purchase is subject t- c-mpliance with the Capital
Adequacy Regulati-ns.
The Issuer has the -pti-n t- redeem all -f the N-tes in full -n 29 August 2022 -r -n any Interest Payment Date thereafter (each an Opti'nal
Redempti'n Date) at their principal am-unt -utstanding, t-gether with any accrued and unpaid interest and any Arrears -f Interest, subject
t- and in acc-rdance with the Terms and C-nditi-ns. In additi-n, the Issuer may, subject t- and in acc-rdance with the C-nditi-ns 6(c) and
6(d), unless previ-usly redeemed in full, redeem the N-tes, in wh-le, but n-t in part, -n n-t less than 30 n-r m-re than 60 days' irrev-cable
1

n-tice t- the N-teh-lders at their principal am-unt t-gether with any interest accrued t- (but excluding) the date fixed f-r redempti-n in
acc-rdance with the Terms and C-nditi-ns and any Arrears -f Interest. In case -f a Capital Disqualificati-n Event in acc-rdance with
C-nditi-ns 6(d), the Issuer may, in its s-le discreti-n but subject t- c-mpliance with applicable Capital Adequacy Regulati-ns, c-nvert,
exchange -r substitute the N-tes in wh-le (but n-t in part) int- -r f-r an-ther series -f n-tes -f the Issuer, -r vary the terms -f the N-tes.
Furtherm-re, the Issuer may redeem, c-nvert, exchange -r substitute the N-tes in wh-le (but n-t in part) int- -r f-r an-ther series -f n-tes -f
the Issuer, -r vary the terms -f the N-tes up-n the -ccurrence -f a Rating Meth-d-l-gy Event in acc-rdance with C-nditi-n 6(e).
The N-tes are expected t- be rated BBB+ by Standard & P--r's Credit Market Services Eur-pe Limited (S&P), a rating agency established
in the Eur-pean C-mmunity and registered pursuant t- Regulati-n (EC) N- 1060/2009 -f the Eur-pean Parliament and -f the C-uncil -f 16
September 2009 -n credit rating agencies, amended by Regulati-n (EC) N- 513/2011 -f the Eur-pean Parliament and -f the C-uncil -f 11
March 2011. A rating is n-t a rec-mmendati-n t- buy, sell -r h-ld securities and may be subject t- suspensi-n, reducti-n -r withdrawal at
any time by the assigning rating agency.
The N-tes will initially be represented by a temp-rary gl-bal n-te (the Temp'rary Gl'bal N'te), with-ut interest c-up-ns, which will be
dep-sited -n -r ab-ut 29 August 2012 (the Cl'sing Date) with a c-mm-n safe-keeper f-r Eur-clear Bank SA/NV (Eur'clear) and
Clearstream Banking, s-ciété an-nyme (Clearstream, Luxemb'urg). Interests in the Temp-rary Gl-bal N-te will be exchangeable f-r
interests in a permanent gl-bal n-te (the Permanent Gl'bal N'te and, t-gether with the Temp-rary Gl-bal N-te, the Gl'bal N'tes), with-ut
interest c-up-ns, -n -r after 8 Oct-ber 2012 (the Exchange Date), up-n certificati-n as t- n-n-U.S. beneficial -wnership. Interests in the
Permanent Gl-bal N-te will be exchangeable f-r definitive N-tes -nly in certain limited circumstances. See "Summary %f Pr%visi%ns relating
t% the N%tes while represented by the Gl%bal N%tes".
Pr-spective invest-rs sh-uld have regard t- the risk fact-rs described under the secti-n headed "Risk Fact%rs" in this Pr-spectus, but sh-uld
read the c-mplete Pr-spectus, including the d-cuments inc-rp-rated by reference, t- get a full understanding -f the risks and merits inherent
in an investment in the N-tes.
Capitalised terms used, but n-t defined, in this secti-n can be f-und elsewhere in this Pr-spectus. F-r the page reference -f the definiti-ns -f
capitalised terms used herein see "Index %f Defined Terms". The language -f the Pr-spectus is English. Certain legislative references and
technical terms have been cited in their -riginal language in -rder that the c-rrect technical meaning may be ascribed t- them under
applicable law.
S-le Structuring Advis-r and Arranger
Rab'bank Internati'nal
J-int Lead Managers
Barclays
M'rgan Stanley
Rab'bank Internati'nal
C--Lead Manager
ABN AMRO
The date -f this Pr-spectus is 24 August 2012.
2

This pr-spectus c-mprises a pr-spectus f-r the purp-ses -f Article 5.4 -f Directive 2003/71/EC (the
Pr'spectus Directive).
This Pr-spectus is t- be read in c-njuncti-n with all d-cuments which are deemed t- be inc-rp-rated herein
by reference (see "D%cuments Inc%rp%rated by Reference"). This Pr-spectus sh-uld be read and c-nstrued
-n the basis that such d-cuments are inc-rp-rated and f-rm part -f the Pr-spectus.
T- the fullest extent permitted by law, n-ne -f Barclays Bank PLC, C-öperatieve Centrale Raiffeisen-
B-erenleenbank B.A. (Rab-bank Internati-nal) and M-rgan Stanley & C-. Internati-nal plc (t-gether, the
J'int Lead Managers) and ABN AMRO Bank N.V. (the C'-Lead Manager and t-gether with the J-int
Lead Managers, the Managers) accepts resp-nsibility whats-ever f-r the c-ntents -f this Pr-spectus -r f-r
any statement, made -r purp-rted t- be made by a Manager -r -n its behalf in c-nnecti-n with the Issuer -r
the issue and -ffering -f the N-tes. The Managers have n-t independently verified such inf-rmati-n. Each -f
the Managers acc-rdingly disclaims all and any liability whether arising in t-rt -r c-ntract -r -therwise (save
as referred t- ab-ve) which it might -therwise have in respect -f this Pr-spectus -r any such statement.
N- pers-n is -r has been auth-rised by the Issuer t- give any inf-rmati-n -r t- make any representati-n n-t
c-ntained in -r n-t c-nsistent with this Pr-spectus -r any -ther inf-rmati-n supplied in c-nnecti-n with the
-ffering -f the N-tes and, if given -r made, such inf-rmati-n -r representati-n must n-t be relied up-n as
having been auth-rised by the Issuer -r the Managers.
Neither this Pr-spectus n-r any -ther inf-rmati-n supplied in c-nnecti-n with the -ffering -f the N-tes (a) is
intended t- pr-vide the basis -f any credit -r -ther evaluati-n -r (b) sh-uld be c-nsidered as a
rec-mmendati-n by the Issuer -r the Managers that any recipient -f this Pr-spectus -r any -ther inf-rmati-n
supplied in c-nnecti-n with the -ffering -f the N-tes sh-uld purchase the N-tes. Each invest-r
c-ntemplating purchasing any N-tes sh-uld make its -wn independent investigati-n -f the financial
c-nditi-n and affairs, and its -wn appraisal -f the creditw-rthiness, -f the Issuer. Neither this Pr-spectus n-r
any -ther inf-rmati-n supplied in c-nnecti-n with the -ffering -f the N-tes c-nstitutes an -ffer -r invitati-n
by -r -n behalf -f the Issuer -r the Managers t- any pers-n t- subscribe f-r -r t- purchase any N-tes.
Neither the delivery -f this Pr-spectus n-r the -ffering, sale -r delivery -f the N-tes shall in any
circumstances create any implicati-n that there has been n- change in the affairs -f the Issuer -r its affiliates
since the date here-f -r imply that the inf-rmati-n c-ntained herein c-ncerning the Issuer is c-rrect at any
time subsequent t- the date here-f -r that any -ther inf-rmati-n supplied in c-nnecti-n with the -ffering -f
the N-tes is c-rrect as -f any time subsequent t- the date indicated in the d-cument c-ntaining the same.
The Managers expressly d- n-t undertake t- review the financial c-nditi-n -r affairs -f the Issuer during the
life -f the N-tes -r t- advise any invest-r in the N-tes -f any inf-rmati-n c-ming t- their attenti-n.
The N-tes have n-t been and will n-t be registered under the United States Securities Act -f 1933, as
amended, (the Securities Act) and are subject t- U.S. tax law requirements. Subject t- certain excepti-ns,
the N-tes may n-t be -ffered, s-ld -r delivered within the United States -r t- U.S. pers-ns. F-r a further
descripti-n -f certain restricti-ns -n the -ffering and sale -f the N-tes and -n distributi-n -f this d-cument,
see "Subscripti%n and Sale" bel-w.
This Pr-spectus d-es n-t c-nstitute an -ffer t- sell -r the s-licitati-n -f an -ffer t- buy the N-tes in any
jurisdicti-n t- any pers-n t- wh-m it is unlawful t- make the -ffer -r s-licitati-n in such jurisdicti-n. The
distributi-n -f this Pr-spectus and the -ffer -r sale -f N-tes may be restricted by law in certain jurisdicti-ns.
Neither the Issuer n-r the Managers represent that this Pr-spectus may be lawfully distributed, -r that the
N-tes may be lawfully -ffered, in c-mpliance with any applicable registrati-n -r -ther requirements in any
such jurisdicti-n, -r pursuant t- an exempti-n available thereunder, -r assume any resp-nsibility f-r
facilitating any such distributi-n -r -ffering. In particular, n- acti-n has been taken by the Issuer -r the
Managers which is intended t- permit a public -ffering -f the N-tes -r the distributi-n -f this Pr-spectus in
3

any jurisdicti-n where acti-n f-r that purp-se is required. Acc-rdingly, n- N-tes may be -ffered -r s-ld,
directly -r indirectly, and neither this Pr-spectus n-r any advertisement -r -ther -ffering material may be
distributed -r published in any jurisdicti-n, except under circumstances that will result in c-mpliance with
any applicable laws and regulati-ns. Pers-ns int- wh-se p-ssessi-n this Pr-spectus -r any N-tes may c-me
must inf-rm themselves ab-ut, and -bserve, any such restricti-ns -n the distributi-n -f this Pr-spectus and
the -ffering and sale -f N-tes. In particular, there are restricti-ns -n the distributi-n -f this Pr-spectus and
the -ffer -r sale -f N-tes in the United States, the Eur-pean Ec-n-mic Area (including the Netherlands and
the United Kingd-m), see "Subscripti%n and Sale".
All references in this d-cument t- eur', Eur' and 5 refer t- the currency intr-duced at the start -f the third
stage -f Eur-pean ec-n-mic and m-netary uni-n pursuant t- the Treaty -n the Functi-ning -f the Eur-pean
Uni-n, as amended.
The N-tes are intended t- be held in a manner which will all-w Eur-system eligibility. This simply means
that the N-tes are intended up-n issue t- be dep-sited with -ne -f the ICSDs (Internati-nal Central Securities
Dep-sitaries) as c-mm-n safekeeper and d-es n-t necessarily mean that the N-tes will be rec-gnised as
eligible c-llateral f-r Eur-system m-netary p-licy and intra-day credit -perati-ns by the Eur-system either
up-n issue -r at any -r all times during their life. Such rec-gniti-n will depend up-n satisfacti-n -f the
Eur-system eligibility criteria.
4

______________________________
CONTENTS
Page
Risk Fact-rs..................................................................................................................................................6
D-cuments Inc-rp-rated by Reference........................................................................................................25
Terms and C-nditi-ns -f the N-tes .............................................................................................................26
Use -f Pr-ceeds..........................................................................................................................................39
Summary -f Pr-visi-ns relating t- the N-tes while represented by the Gl-bal N-tes ...................................40
Descripti-n -f the Issuer .............................................................................................................................43
Taxati-n .....................................................................................................................................................49
Subscripti-n and Sale .................................................................................................................................52
General Inf-rmati-n ...................................................................................................................................54
Index -f Defined Terms..............................................................................................................................56
______________________________
5

RISK FACTORS
The Issuer believes that the f%ll%wing fact%rs may affect its ability t% fulfil its %bligati%ns under the N%tes. All
%f these fact%rs are c%ntingencies which may %r may n%t %ccur and the Issuer is n%t in a p%siti%n t% express a
view %n the likelih%%d %f any such c%ntingency %ccurring.
In additi%n, fact%rs which are material f%r the purp%se %f assessing the market risks ass%ciated with the
N%tes are described bel%w.
The Issuer believes that the fact%rs described bel%w represent the principal risks inherent in investing in the
N%tes, but the inability %f the Issuer t% pay interest, principal %r %ther am%unts %n %r in c%nnecti%n with the
N%tes may %ccur f%r %ther reas%ns which may n%t be c%nsidered significant risks by the Issuer based %n
inf%rmati%n currently available t% it %r which it may n%t currently be able t% anticipate. Pr%spective
invest%rs sh%uld als% read the detailed inf%rmati%n set %ut elsewhere in this Pr%spectus and reach their %wn
views pri%r t% making any investment decisi%n.
Fact'rs that may affect the Issuer's ability t' fulfil its 'bligati'ns under the N'tes
Financial Risks
Changes in the financial markets and general ec'n'mic c'nditi'ns c'uld have a material adverse effect
'n the Issuer's business, revenues, results and financial c'nditi'n
The Issuer's revenues, results and financial c-nditi-n are affected by changing financial market and general
ec-n-mic c-nditi-ns, which are -utside the c-ntr-l -f the Issuer. These c-nditi-ns can cause the Issuer's
results -f -perati-ns t- fluctuate fr-m year t- year, as well as -n a l-ng-term basis, in ways that may be
unpredictable. These c-nditi-ns include empl-yment levels, c-nsumer lending and spending, c-rp-rate
spending, changes in m-netary p-licies, changes in availability -f debt financing, inflati-n, as well as
fluctuati-ns in interest rates, fluctuati-ns in prices -f equity, -ther securities -r pr-perty in the c-untries in
which it -perates. The Issuer will als- be affected by the impact -n financial markets which may arise fr-m
catastr-phic events, terr-rism and -ther acts -f war and the g-vernmental and p-litical devel-pments relating
t- the f-reg-ing, as well as s-cial -r p-litical instability, dipl-matic relati-ns and internati-nal c-nflicts.
These c-nditi-ns als- include ec-n-mic cycles such as insurance industry cycles and banking industry cycles
as well as financial market cycles, including v-latile m-vements in market prices f-r securities.
Gl-bal financial markets have experienced extreme and unprecedented v-latility and disrupti-n, which have
had, and may c-ntinue t- have, a material adverse effect -n the Issuer's revenues, results and financial
c-nditi-n. Further significant d-wnturns in equity markets, further d-wnward appraisals -f pr-perty values
and/-r significant m-vements -f interest rates and credit spreads c-uld have a material adverse effect -n the
Issuer's capital and s-lvency p-siti-n and results. The ec-n-mic d-wnturns c-uld als- result in increased
incidence -f internal and external fraud, including fraudulent claims by cust-mers, theft, c-rrupti-n and
insider trading. Emergency measures designed t- stabilise the Eur-pean Uni-n and the US financial markets
are beginning t- wind d-wn.
Since 2009, g-vernments and m-netary auth-rities ar-und the w-rld, including in the Netherlands, have
taken acti-ns t- stabilise financial markets and prevent the failure -f financial instituti-ns and states. The
Eur-pean s-vereign debt crisis has c-ntinued until n-w and credit spreads have n-t yet fully returned t- pre-
gl-bal ec-n-mic and financial crisis levels. The Issuer is m-nit-ring its exp-sures cl-sely, but the Eur-pean
s-vereign debt crisis may affect the Issuer's results in the future.
As a result -f the recent ec-n-mic d-wnturn, driving many c-untries int- recessi-n (including the
Netherlands where the Issuer -perates), there have been increasingly high levels -f unempl-yment. Bank
6

lending has been severely reduced and the h-using markets in Eur-pe and N-rth America have declined. In
additi-n t- the -ther risks described in this secti-n, these c-nditi-ns have resulted, and may c-ntinue t-
result, in a reducti-n in demand f-r the Issuer's pr-ducts, as well as a reducti-n in the value -f its assets
under management (AUM). The Issuer has experienced, and may c-ntinue t- experience, m-re fluctuati-ns
in claims and p-licy lapses and withdrawals. Any reducti-n in demand f-r the Issuer's pr-ducts, decline in
the market value -f the Issuer's assets under management -r an increase in p-licy lapses -r withdrawals,
w-uld result in a reducti-n in the fee and premium inc-me generated by the Issuer.
Furtherm-re, the Issuer's c-st -f pr-tecting itself against certain risks, in particular interest rate v-latility and
equity risk, that are related t- these distressed c-nditi-ns thr-ugh, f-r instance, derivative instruments has
been pr-p-rti-nally higher due t- the v-latility in the financial markets. The Issuer cann-t predict h-w l-ng
these distressed c-nditi-ns will c-ntinue, but sustained v-latility and c-ntinuance -f these distressed
c-nditi-ns -r any repeat -f such distressed c-nditi-ns c-uld increase the c-sts -f hedging and materially
adversely affect its business, revenues, results, cash fl-ws and financial c-nditi-n.
The Issuer is exp'sed t' credit risks, and defaults 'r increased fear 'f default 'f the Issuer's debt'rs 'r
entities in which the Issuer has invested c'uld have a material adverse effect 'n the value 'f the
Issuer's assets
Credit risk refers t- the p-tential l-sses incurred by the Issuer as a result -f debt-rs n-t being able t- fulfil
their -bligati-ns when due, -r a perceived increased likelih--d there-f. L-sses incurred due t- credit risk
include actual l-sses fr-m defaults, market value l-sses due t- credit rating d-wngrades and/-r spread
widening, -r impairments and write-d-wns. The Issuer is exp-sed t- vari-us types -f general credit risk,
including spread risk, default risk and c-ncentrati-n risk.
Like m-st insurance c-mpanies, the Issuer has a significant fixed inc-me p-rtf-li- in which assets are
matched against its life insurance liabilities. The fixed inc-me p-rtf-li- is measured at fair market value. The
Issuer is exp-sed t- the risk that the market value -f these assets decreases. A number -f fact-rs can cause an
individual asset -r a wh-le class -f assets t- decrease in market value, including a percepti-n -r fear in the
market that there is an increase in the likelih--d -f defaults (the "spread risk"), -r a material decline in the
liquidity -f these assets making them difficult t- value.
The Issuer is als- exp-sed t- default risk, which is the risk that third parties -wing m-ney, securities -r -ther
assets t- the Issuer d- n-t pay -r fulfil their -bligati-ns when due. These parties include trading
c-unterparties, c-unterparties under swaps and credit and -ther derivative c-ntracts, clearing agents,
exchanges, clearing h-uses, reinsurers, b-nd issuers, and financial intermediaries. Third parties may default
-n their -bligati-ns t- the Issuer due t- bankruptcy, lack -f liquidity, d-wnturns in the ec-n-my -r real estate
values, -perati-nal failure, fraud -r -ther reas-ns.
The Issuer is als- exp-sed t- c-ncentrati-n risk, which is the risk -f default by c-unterparties -r investments
in which it has taken large p-siti-ns. A single default -f a large exp-sure c-uld theref-re lead t- a significant
l-ss f-r the Issuer.
The Issuer is exp'sed t' c'unterparty risk in relati'n t' 'ther financial instituti'ns. Deteri'rati'ns in
the financial s'undness 'f 'ther financial instituti'ns may have a material adverse effect 'n the
Issuer's business, revenues, results and financial c'nditi'n
Due t- the nature -f the gl-bal financial system, financial instituti-ns, such as the Issuer, are interdependent
as a result -f trading, c-unterparty and -ther relati-nships. Other financial instituti-ns with wh-m the Issuer
c-nducts business act as c-unterparties t- the Issuer in such capacities as b-rr-wers under l-ans, issuers -f
securities, cust-mers, banks, reinsurance c-mpanies, trading c-unterparties, c-unterparties under swaps and
credit and -ther derivative c-ntracts, clearing agents, exchanges, clearing h-uses, br-kers and dealers,
c-mmercial banks, investment banks, mutual and hedge funds and -ther financial intermediaries. In any -f
7

these capacities, a financial instituti-n acting as a c-unterparty may n-t perf-rm their -bligati-ns due t-,
am-ng -ther things, bankruptcy, lack -f liquidity, market d-wnturns -r -perati-nal failures, and the
c-llateral -r security they pr-vide may pr-ve inadequate t- c-ver their -bligati-ns at the time -f the default.
The interdependence -f financial instituti-ns means that the failure -f a sufficiently large and influential
financial instituti-n due t- disrupti-ns in the financial markets c-uld materially disrupt securities markets -r
clearance and settlement systems in the markets. This c-uld cause severe market declines -r v-latility. Such
a failure c-uld als- lead t- a chain -f defaults by c-unterparties that c-uld materially adversely affect the
Issuer. This risk, kn-wn as "systemic risk", c-uld adversely impact future pr-duct sales as a result -f reduced
c-nfidence in the insurance and banking industries. It c-uld als- reduce results because -f market declines
and write-d-wns -f assets and claims -n third parties. The Issuer believes that despite increased f-cus by
regulat-rs ar-und the w-rld with respect t- systemic risk, this risk remains part -f the financial system in
which the Issuer -perates and disl-cati-ns caused by the interdependency -f financial market participants
c-uld have a material adverse effect -n its business, revenues, results and financial c-nditi-n.
The Issuer's exp'sure t' fluctuati'ns in the eXuity, fixed inc'me and pr'perty markets c'uld result in
a material adverse effect 'n its returns 'n invested assets and the value 'f its investment p'rtf'li' 'r
its s'lvency p'siti'n
The Issuer's investment returns are highly susceptible t- fluctuati-ns in equity, fixed inc-me and pr-perty
markets.
The Issuer bears all the risk ass-ciated with its -wn investments. Fluctuati-ns in the equity, fixed inc-me and
pr-perty markets affect the Issuer's pr-fitability, capital p-siti-n and sales -f equity related pr-ducts. A
decline in any -f these markets will lead t- a reducti-n -f unrealised gains in the asset -r result in unrealised
l-sses and c-uld result in impairments. Any decline in the market values -f these assets reduces the Issuer's
s-lvency, which c-uld materially adversely impact the Issuer's financial c-nditi-n and the Issuer's ability t-
attract -r c-nduct new business.
The value -f the Issuer's -wn risk fixed inc-me p-rtf-li- c-uld be affected by changes in the credit rating -f
the issuer -f the securities as well as by liquidity generally in the b-nd markets. When the credit rating -f the
issuer -f the debt securities falls, the value -f the fixed inc-me security may als- decline. In additi-n, m-st
-f the Issuer's fixed inc-me securities are classified as financial assets at fair value thr-ugh pr-fit -r l-ss and,
as a result, any decline in the market value -f these fixed inc-me securities is reflected as a l-ss in the peri-d
during which it -ccurred, even if the Issuer has n-t s-ld the securities but kept them in its p-rtf-li-.
The value -f the Issuer's pr-perty p-rtf-li- is subject t- risks related t-, am-ngst -thers, -ccupancy levels,
rent levels, c-nsumer spending, prices -f pr-perties and interest rates. Due t- the recent ec-n-mic d-wnturn,
the pr-perty market faces w-rsening c-mmercial pr-perty -ccupancy levels and l-w c-nsumer spending -n
residential pr-perty, which, in turn, c-uld reduce returns -n pr-perty investments. Occupancy levels c-uld
dr-p if the Issuer d-es n-t pr-perly manage the c-ntractual pr-visi-ns g-verning the leases related t- the
pr-perties. F-r instance, sh-rt-term c-ntracts -r pr-visi-ns entitling cust-mers t- terminate c-ntracts early
c-uld reduce -ccupancy. The recent ec-n-mic d-wnturn c-uld als- result in a further decline in the market
values -f residential and c-mmercial pr-perties as a result -f reluctance in the market t- further buy pr-perty
-r t- invest in new building pr-jects. Any decline in the market values -f its pr-perty investments c-uld have
a material adverse effect -n the Issuer's business, revenues, results and financial c-nditi-n.
The Issuer is exp-sed n-t -nly in respect -f its -wn capital invested in equities, fixed inc-me assets and
pr-perty, but als- in respect -f its liabilities t- p-licyh-lders in respect -f the funds -f p-licyh-lders and
-ther cust-mers invested in equities, fixed inc-me assets and pr-perty under life insurance c-ntracts such as
unit-linked pr-ducts and investment c-ntracts.
8

Many -f the Issuer's life insurance pr-ducts guarantee a minimum investment return -r minimum
accumulati-n at maturity t- the p-licyh-lder. In the event that the decline in value -f the invested assets is
greater than the decline in liabilities ass-ciated with the guaranteed benefits, the Issuer must increase its
pr-visi-ns f-rmed f-r the purp-se -f funding these future guaranteed benefits, which will result in an adverse
impact -n the Issuer's results.
In additi-n, the Issuer's revenues fr-m unit-linked pr-ducts (including th-se with-ut minimum guarantees)
and investment c-ntracts depend -n fees paid by the cust-mer. Because th-se fees are generally assessed as a
percentage -f AUM , they vary directly with the market value -f such assets. Theref-re a general decline in
financial markets, including in particular equity markets, will reduce the Issuer's revenues under these
c-ntracts.
Interest rate v'latility and sustained l'w interest rate levels c'uld have a material adverse effect 'n the
Issuer's revenues, results and financial c'nditi'n
Interest rate risk generally -riginates fr-m m-vements -f interest rates, either upwards -r d-wnwards, and a
mismatch in the durati-n -f assets and liabilities. Interest rates are highly sensitive t- many fact-rs, including
g-vernmental, m-netary and tax p-licies, d-mestic and internati-nal ec-n-mic and p-litical c-nsiderati-ns,
fiscal deficits, trade surpluses -r deficits, regulat-ry requirements and -ther fact-rs bey-nd the c-ntr-l -f the
Issuer. The value -f the Issuer's liabilities in respect -f certain pr-ducts, n-tably annuities, varies as interest
rates fluctuate. While the value -f fixed inc-me assets and derivatives is als- affected by fluctuati-ns in
interest rates, the impact -f such fluctuati-ns -n assets and liabilities may be different due t- fact-rs such as
differences in v-lume and durati-n. Furtherm-re, interest rates -f different maturities can als- fluctuate
relative t- each -ther. This results in a steepening -r flattening -f the yield curve. This may have an effect -n
the Issuer's assets and liabilities, may lead t- l-sses and may have an impact -n the valuati-n -f the Issuer.
The Issuer uses derivative instruments such as interest rate swaps and swapti-ns t- mitigate its exp-sure t-
interest rate v-latility. Any mismatch between the interest rate used f-r disc-unting the liabilities and the
hedged interest rate c-uld render the hedge unsuccessful and exp-se the Issuer t- unexpected l-sses and
v-latility.
IlliXuidity 'f certain investment assets c'uld prevent the Issuer fr'm selling investments at fair prices
in a timely manner
Liquidity risk is inherent in much -f the Issuer's business. Each asset purchased and liability s-ld has unique
liquidity characteristics. S-me assets have high liquidity in that they can be c-nverted int- cash relatively
quickly, while -ther assets, such as privately placed l-ans, m-rtgage l-ans, pr-perty and limited partnership
interests, have l-w liquidity. Market d-wnturns exacerbate l-w liquidity. They may als- reduce the liquidity
-f th-se assets which are typically liquid, as has -ccurred with the markets f-r asset-backed securities
relating t- pr-perty assets and -ther c-llateralised debt and l-an -bligati-ns. Since 2007, illiquidity has
generally been higher than bef-re in all fixed inc-me classes, particularly in asset-backed securities. Due t-
illiquidity in the capital markets f-r certain asset classes, the Issuer may be unable t- sell -r buy assets at
market efficient prices and may theref-re realise investment l-sses -r be -bliged t- issue securities at higher
financing c-sts.
Adverse experience c'mpared with the assumpti'ns used in pricing pr'ducts, establishing pr'visi'ns
and rep'rting business results c'uld have a material adverse effect 'n the Issuer's business, revenues,
results and financial c'nditi'n
The Issuer's financial results fr-m its -perati-ns and its embedded value depend t- a significant extent -n
whether its actual experience is c-nsistent with the assumpti-ns and m-dels used at the time the p-licy is
underwritten, when setting the prices f-r pr-ducts and establishing the pr-visi-ns f-r future p-licy benefits
and claims. These assumpti-ns are estimates based -n hist-rical data and statistical pr-jecti-ns -f what the
9

Issuer believes the settlement and administrati-n -f its liabilities will be and are theref-re applied t- arrive at
quantificati-ns -f s-me -f the Issuer's risk exp-sures.
Alth-ugh the Issuer m-nit-rs its actual experience against the assumpti-ns it has used and refines its l-ng-
term assumpti-ns in acc-rdance with actual experience, it is imp-ssible t- determine the precise am-unts
that are ultimately payable. Statistical meth-ds and m-dels may n-t accurately quantify the Issuer's risk
exp-sure if circumstances arise that were n-t -bserved in the hist-rical data -r if the data -therwise pr-ves t-
be inaccurate.
Lapse risk, which is the risk -f p-licy lapses -r withdrawal increases bey-nd expectati-ns, is an-ther
imp-rtant variable f-r the Issuer's business as the Issuer is n-t always able t- fully rec-ver the up-fr-nt
expenses incurred by it in selling a pr-duct and it may f-rce the Issuer t- sell assets at depressed prices.
Lapse risk c-uld have a material adverse effect -n the Issuer's fee inc-me, revenues and results. The Issuer is
facing the c-nsequences -f external devel-pments related t- the distributi-n fees -f insurers. This relates t-
the pr-hibiti-n -f retr-cessi-n fees f-r br-kers that will pr-bably be effective per 1 January 2013 f-r
c-mplex financial pr-ducts such as life insurance, -ccupati-nal disability insurance and m-rtgages in
particular.
In additi-n, certain acquisiti-n c-sts related t- the sale -f new p-licies and the purchase -f p-licies already in
f-rce are deferred and rec-rded as assets -n the Issuer's balance sheet and are am-rtised int- inc-me -ver
time. If the assumpti-ns relating t- the future pr-fitability -f these p-licies (such as assumpti-ns relating t-
future claims, investment inc-me and expenses) are n-t realised, these c-sts c-uld be am-rtised faster -r
written -ff entirely if deemed unrec-verable. The accelerated am-rtisati-n -r write--ff c-uld have a material
adverse effect -n the Issuer's results.
Changes in l'ngevity, m'rtality and m'rbidity experience may materially adversely affect the results
'f the Issuer
The Issuer's is exp-sed t- l-ngevity risk (the risk the insured party lives l-nger), m-rtality risk (the risk the
insured party dies s--ner) and m-rbidity risk (the risk the insured party falls seri-usly ill -r is disabled).
Annuities (including the Issuer's single premium gr-up pensi-n business) and -ther life insurance pr-ducts
are subject t- l-ngevity risk, which is the risk that annuitants live l-nger than was pr-jected at the time their
p-licies were issued, with the result that the insurer must c-ntinue paying -ut t- the annuitants f-r l-nger
than anticipated (and theref-re l-nger than was reflected in the price -f the annuity and in the liability
established f-r -ne p-licy).
Alth-ugh the Issuer believes that its established pr-visi-ns are adequate, due t- the uncertainties ass-ciated
with such pr-visi-ns (in particular the risk -f future life expectancy increasing at a faster rate than expected),
there can be n- assurance that its pr-visi-ns will indeed be adequate and the Issuer expects m-re additi-ns t-
its pr-visi-ns -n acc-unt -f l-ngevity risk will have t- be made in future years. Sh-uld the pr-visi-ns be
insufficient, the Issuer's business c-uld suffer significant l-sses that c-uld have a material adverse effect -n
its business, revenues, results and financial c-nditi-n.
The Issuer's life insurance business is als- exp-sed t- m-rtality risk, especially in term life insurance and
pensi-n c-ntracts where the surviving partner is the beneficiary. The m-rtality risk ass-ciated with the
Issuer's life business has been partly reinsured in an eff-rt t- c-ntr-l the risk.
The Issuer's life insurance business is exp-sed t- m-rbidity risk, in particular the risk that m-re
p-licyh-lders than anticipated will suffer fr-m l-ng-term health impairments and the risk, in the case -f
inc-me pr-tecti-n -r waiver -f premium benefits, that th-se wh- are eligible t- make a claim d- s- f-r
l-nger than anticipated (and theref-re l-nger than was reflected in the price -f the p-licies and in the liability
established f-r the p-licies). Impr-vements in medical treatments that pr-l-ng life with-ut rest-ring the
10