October 2011 Policyholder Briefing

Centuria Life Policyholder’s y Investment Presentation October 2011 Melbourne Sean Webster Investment Manager

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Before we begin: Information in this presentation is general information only in relation to the investments in the Investment Bonds Managed by the Centuria Life Limited.

In preparing this presentation we have not taken into consideration any persons personal circumstances, objectives or needs.

Before you make any decision in relation to your investment, we you obtain financial advice from a licensed financial recommend that y adviser.

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

Perspective on Global and Australian Economy Current Economic Situation What is the outlook and where are the risks for the Australian economy ?

Your Investments What is the outlook for financial markets?

How are your funds invested currently?

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

What does the global economy look like?

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

What does the global economy look like The United States

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

What does the global economy look like?

The United States

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

What does the global economy look like ?

Global Debt Issues

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

What does the global economy look like ?

Asia

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

What does the global economy look like ?

China

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

What does the Australian Economy look like?

Strong GDP growth forecast for the Australian Economy

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

Australian Economy – growth drivers Coal and Iron Exports at record levels and prices increasing

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

Australian economy on the cusp of a resource and energy investment boom

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

How big is this resource and energy investment boom

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

How big is this resource and energy investment boom ?

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

What about the rest of the Australian economy?

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

What about the rest of the Australian economy?

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

What about the rest of the Australian economy?

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

The equity market

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

The equity market and company profits

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

The Outlook for Australia Interest rates likely to decline very gradually (1 cut in Q1) unless there is a global banking crisis Economic growth likely to remain strong (2-3%pa) (2 3%pa) supported by energy and resource investment, driven by Chinese and SE Asian growth Unemployment likely to be stable with some upside bias Inflation likely to remain in RBA band for 12 to 18 months

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

Commodity and energy prices likely to move sideways with some downward potential if global growth slows further

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

Risk Factors

Debt default in Greece, Spain and or others US economy slows into recession ((“double-dip�) double-dip ) Government and central bank mismanagement Debt burden in the global economy China slows significantly and resources prices drop sharply

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Insurance Bond Portfolio Management

What are we doing to manage portfolios in the current environment?

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Insurance Bond Portfolio Management

Diversification is critical - no big bets on a single investment

Have moved to higher fixed interest and cash holdings

Actively A i l allocate ll assets as the h environment i changes

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Insurance Bond Portfolio Management

Fixed Interest has performed well, reasonable rates (premiums)) are available from high (p g quality q y investments Unlisted property is offering good yields Listed Propertyy - returns likelyy to be largely g y derived from the income stream Equities have delivered reasonable returns to June 30 and are likely to offer returns in line with their yield ~4.5%

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Insurance Bond Portfolio Management

FUND

June 2011 Returns

June 2010 Returns

Gross

Net (1)

Gross

Net (1)

Aust Property and Mortgage Fund

6.4

3.1

10.4

6.0

Australian Shares Fund

13 2 13.2

93 9.3

12 7 12.7

89 8.9

Balanced Fund

11.9

7.5

11.3

7.0

Growth Bond

9.1

5.4

3.6

1.2

Hi h Growth High G th F Fund d

13 7 13.7

98 9.8

10 5 10.5

70 7.0

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Insurance Bond Portfolio Management

Capital Guaranteed (Bonus Linked) Bonds 他 Income Accumulation Fund 他 Capital C it l Guaranteed G t d Fund F d

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Insurance Bond Portfolio Outlook

Overall Philosophy is conservative (or low risk) and focuses on capital preservation Sound income streams investing in high quality assets with the protection of a capital guarantee Holds defensive assets only - Cash, Quality Fixed Interest including Mortgages (IA), Direct Property (IA)

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Insurance Bond Portfolio Outlook

Returns will be positive, and are dependant on the interest rate environment In general, as interest rates increase, returns will improve p and as theyy move down,, returns decline

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Insurance Bond Portfolio Management

Income Accumulation Fund – underlying fixed interest assets are benefitting from the higher average rate over the year June 30 Bonus level was impacted due to some legacy mortgages and a drop in the value of the net tangible g assets of one of the unlisted p property p y trusts Capital C i lG Guarantee F Fund d – the h underlying d l i cash h and fixed interest investments are delivering improved income streams on higher average interest rates rates.

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Insurance Bond Portfolio Management

FUND

June 2011 Returns

June 2010 Returns

Gross

Net (1)

Gross

Net (1)

Capital Guaranteed

4.67

3.10

4.08

2.85

Income Accumulation

3 27 3.27

2 10 2.10

3 40 3.40

2 00 2.00

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Insurance Bond Portfolio Management

Volatility Value of $100 initial investment at Nov 2007 140

120 100

80

60

40 20

0 Nov-07

May-08

Nov-08

Capital Guaranteed Bond

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

May-09

Australian Equity

Nov-09

May-10

International Equity

Nov-10

Listed Property

May-11

Insurance Bond Portfolio Outlook

The Outlook for Interest Rates

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Insurance Bond Portfolio Management

The Outlook for Interest Rates

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

Macro Economic Overview

Conclusions Reasonable outlook for global and Australian economy – dependant on what happens in Europe and China Environment is one of heightened g risk so we have down-weighted growth assets, especially shares and in the Capital Guaranteed Bonds we have an emphasis on very quality assets Active investing investing.

Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.