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As of December 31, 2012, there were 68 life insurance companies in the market, including 42 domestic life companies and 26 foreign life insurers.

As of December 31, 2012, Aegon-CNOOC ranked 38, in terms of total premium income, among all life insurance companies and 13th1 _{among foreign life companies. The company’s market} share among foreign-invested companies was 2.9%1_{. Channel} contributions for Aegon-CNOOC ranked in the following order: brokerage, bancassurance, DM, agency and group in terms of annual premium equivalent production and bancassurance, brokerage, group, DM and agency in terms of first year premium production.

A number of new life insurance companies were established in 2012, including five regional life insurance companies (Qian Hai Life based in Shenzhen, Guangdong Province; Soochow Life based in Suzhou, Jiangsu Province; Zhu Jiang Life based in Guangzhou, Guangdong Province, Hong Kang Life based in Beijing, Ji Xiang life based in Changsha, Hunan Province) and one foreign life company (Pramerica Fosun Life based in Shanghai). Many competitors in China are actively developing new

distribution channels or new tools for insurance sales in line with the regulatory call to promote multiple distribution channels in China, for example, Li An Life started a tele-marketing channel in March 2012. More and more companies kicked off e-business (for example AVIVA-COFCO Life started its e-sales channel in August 2012) and are exploring successful models in this field (for example Guo Hua Life partnered with www.taobao. com and generated more than RMB 100 million in premiums by selling single-pay universal life products over a 4-day campaign in December 2012, which received encouragement from CIRC. In addition, Guo Hua Life entered into a strategic co-operation agreement with China Telecom’s E-business Company to leverage China Telecom’s technology and channel advantages to reach a vast number of potential customers); China Pacific Insurance (Group) Corporation (CPIC) partnered with Lenovo Group to launch the Smart Mobile Terminal for insurance distribution. AIA China cooperated with Easy Life (a multimedia terminal provider in China) to use the insurance distribution self-service machines along Shanghai’s Metro Network to sell insurance products. India - Aegon Religare

The first year premium which is a measure of new business secured by the life insurers during January to December 2012 was INR 1,115 billion as compared to INR 1,111 billion in the corresponding period in 2011 registering a marginal increase of 0.3%. In terms of individual and group business during January to December 2012, 59.3% of first year premiums were underwritten in the individual segment while 40.7% of the business was in the group business segment (57% and 43% respectively in the corresponding period in 2011)2_.

For the latest information available on a fiscal year basis (April - March), linked new business saw a significant drop of 67% to INR 174 billion in 2011-12 from INR 536 billion in 2010-11. The decline in linked business contributions has been offset by the growth in non linked business collections by 33% to INR 966 billion in 2011-12 from INR 728 billion in 2010-2011. The total premium underwritten by the life insurance sector in 2011-2012 was INR 2,870 billion as against INR 2,916 billion in 2010-2011 exhibiting a decline of 1.57%. While renewal premiums accounted for 60.31% (56.66% in 2010-11) of the total premiums received by life insurers, first year premiums contributed 39.69% (43.34% in 2010-2011)3_. The agency force continues to be an important distribution channel. Life insurers with banking partners are able to scale up distribution platforms which are gradually picking up volumes. There were 24 life insurers licensed in India as of the end of December 2012. The Life Insurance Company of India remains the dominant player in the market and has a 73% share of new business premiums while the balance is dispersed among private sector companies.

During the period from January to December 2012, the total premium collected by Aegon Religare decreased by 2.16% to around INR 4.52 billion as against INR 4.62 billion in 2011. The fall can be attributed to the drop in new business premium collection by nearly 35.5% on a year over year basis from INR 2.59 billion to INR 1.67 billion which has been offset by the growth in renewal premium collection by 40.2% to around INR 2.85 billion, compared to INR 2.03 billion for the corresponding period in 2011.

Aegon Religare has been making steady progress in the vastly competitive Indian insurance market by striving to drive growth through launching innovative products and building upon the proprietary channels (for example Agency and DTC) and strategic tie-ups with third party distributors. Being a pioneer in the country for online protection products, Aegon is focusing on this model to offer competitively priced products with better and more innovative features.

Japan - Aegon Sony Life

The bancassurance channel is the key area of growth within the Japanese insurance market. The largest share of market growth comes from single premium whole life products. Its surrender payment rate is higher than the savings account interest and its commission rate serves as the incentive for strong sales by bancassurance representatives.

1 Source: China Insurance Regulatory Commission (CIRC).

2 Source: Monthly New Business Report from the Insurance Regulatory and Development Authority (IRDA) website. 3 Source: IRDA Annual Report 2011-2012.

Business overview Overview Asia

Due to the difficulty in maintaining the public pension scheme, driven by falling birth rates and an aging population, there is a strong need in Japan for individual annuity products as a means for self-support after retirement. GMAB remains the main product in the variable annuities market. The players in the variable annuities market have been reduced to six companies since Tokyo Marine Financial suspended its Variable Annuities sales in July 2012 following Allianz last year. Up to December 2012, Aegon Sony Life has achieved cumulative annual variable annuities sales of JPY 34.3 billion (2011: JPY 12.9 billion). Asia - ADAMS

Economic pressures on traditional distribution channels and changes in customer purchasing behavior are driving an overall market change toward the recognition that DM is a growing opportunity requiring further proposition development. Multi- national insurers are trying to grow capability across the region. In the DTC space market participants serve customers through their preferred channels, for insurers this has mostly manifested itself in the tactical deployment of different media such as Direct Response TV, product micro-sites, health portals, social media platforms and mobile applications.

Hong Kong and Singapore - TLB

One of the key challenges affecting the Hong Kong and Singapore regions is the number of new providers entering the high-net-worth and affluent market, notably HSBC Life, AIA, Manulife Bermuda and Sun Life Bermuda.

As of December 31, 2012, TLB recorded total production of approximately USD 26.7 million (2011: USD 32.4 million).

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