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TWST: Can we begin with a brief introduction to Friends Provident (London:FP.L) including a brief historical sketch and then bring us up to date with where the company is positioned as we speak?

Mr. Ferreira: We are one of the UK’s leading Life and Pensions and Asset Management Groups. The business was established in 1832 for members of the Society of Friends and in July last year converted from being a mutual company into a proprietary company and went on to list very successfully on the London Exchange. We are now constituents of both the FTSE100 index and FTSE4Good index covering ethical companies. In terms of our business, we are predominately a UK focused group with two core businesses -- Life and Pensions and Asset Management. In the Life and Pensions business we offer a broad spectrum of pensions, savings and protection products and have a market share of around 4%. We have a particularly strong presence in the group pensions market where we went from very small beginnings about three years ago to being one of the leading players in that market today. On the asset management side, our operations are undertaken through a separately listed subsidiary called Friends Ivory & Sime (FIS) in which we hold 67% of the shares. FIS has over sixty billion Pounds of funds under management and has a reputation as a leader in ethical investment. FIS basically provides a wide range of investment services to institutional, corporate and retail clients. Our products are distributed mainly through IFAs but we also have a direct sales force and other direct distribution channels which gives us flexibility to manage our distribution. That’s essentially the short overview the group.

TWST: On Life and Pensions what’s been driving growth over the last few years and where do you stand now in terms of revenue?

Mr. Ferreira: Historically, the company has grown both organically and by acquisition. If we consider growth over the last three years, in 1998 we acquired London and Manchester, which had a very strong corporate pensions’ business. When I mentioned our strengths in the pensions business earlier, that’s when that part of our business took off. There was a combination of both the pensions expertise in London and Manchester and the technology strength of Friends Provident, which combined to give us a very strong product offering. We developed what was essentially the first straight through processing system for group business, and possibly still the only one that has no manual intervention, either in the setting up or in the basic day-to-day running of group pension schemes. That has resulted in us growing strongly from a very small market position at that stage to being one of the top five players in that market. Over the shorter term, our overall business has grown fairly strongly and we reported total Life and Pensions premium sales of 845 million Pounds for the first half of 2002; that’s an increase of 17% over the same period in 2001. Our APE, which is the common industry standard for measuring premiums received (calculated as regular premiums plus 10% of any single premium business) was £182m for the first six months of this year, representing a 14% increase over the same period in 2001. This was announced at FP's interim results on 31st July. So overall our growth has been robust given the current market environment.

TWST: What is a summary of the strategy going forward?

Mr. Ferreira: We currently have both of our businesses, our Asset Management business and our Life and Pensions business, in the top ten position in their respective markets. So our long term objective is to achieve top five positions over a period of, say, five years. Our corporate strategy is really to grow both our core businesses and to grow them profitably. In Life and Pensions, we will be focused primarily on growing organically, even though recently we have acquired the offshore business operations of Royal & SunAlliance. Our objectives are to focus on enhancing our distribution, improving our service standards and improving our cost efficiency. We believe the key to that is to use technology and we are well recognized for being at the forefront of the application of technology in the insurance industry. Our group pensions system which I mentioned earlier, for example, makes extensive use of technology and we have been able to demonstrate the benefits of it to ourselves, our customers and to the IFAs. With our asset management business, we intend to continue to grow rapidly through selective acquisitions and I believe that the current environment will create some opportunities for us in this area.