Obligation NNGroupe 9% ( XS0821168423 ) en EUR

NNGroupe

100 % ▲

Pays-Bas

XS0821168423 ( en EUR )

9% par an ( paiement annuel )

28/08/2042 - Obligation échue

Prospectus brochure de l'obligation NN Group XS0821168423 en EUR 9%, échue

100 000 EUR

500 000 000 EUR

NN Group est une société d'assurance et de gestion d'actifs néerlandaise cotée en bourse, opérant dans divers marchés internationaux.

L'Obligation émise par NNGroupe ( Pays-Bas ) , en EUR, avec le code ISIN XS0821168423, paye un coupon de 9% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 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.
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______________________________
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
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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