Pre-stabilisation announcement

Pre-stabilisation announcement

Not for distribution, directly or indirectly, in or into the United States or any jurisdiction in which such distribution would be unlawful.

DIRECT LINE INSURANCE GROUP PLC

Stabilisation Notice

UBS Limited (contact: Gareth McCartney ; telephone: 0044 20756 82227) hereby gives notice that the Stabilisation Manager named below may stabilise the offer of the following securities in accordance with Commission Regulation (EC) No. 2273/2003 implementing the Market Abuse Directive (2003/6)

In connection with its Stabilisation activities Royal Bank of Scotland Group plc has granted UBS Limited, on behalf of the Underwriters, an over-allotment option, exercisable once for a period of 30 days after the announcement of the Offer Price on or before 20 September 2013 which, if exercised will require Royal Bank of Scotland Group plc to sell up to 10 per cent. of the aggregate number of Offering Shares available in the Offering (before any exercise of the Over-allotment Option) at the Offer Price to cover short positions arising from such over-allotments (if any) and/or sales of shares effected by it during the Stabilisation period.

UBS Limited has agreed with Royal Bank of Scotland Group plc that any over-allotment of the Offering Shares by it or any of its agents will be up to a maximum of 10 per cent. of the total number of the Offering Shares (before any exercise of the Over-allotment Option).

Number of Offering Shares: 272.7 million

Number of shares subject to the over-allotment option: 27.3 million

In connection with the offer of the above securities, the Stabilisation Manager(s) may over-allot the securities or effect transactions with a view to supporting the market price of the securities at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilisation Manager(s) will take any Stabilisation action and any Stabilisation action, if begun, may be ended at any time.

This announcement is for information purposes only and does not constitute an invitation or offer to underwrite, subscribe for or otherwise acquire or dispose of any securities of the Issuer in any jurisdiction.

This announcement and the offer of the securities to which it relates are only addressed to and directed at persons outside the United Kingdom and persons in the United Kingdom who have professional experience in matters related to investments or who are high net worth persons within article 12(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and must not be acted on or relied on by other persons in the United Kingdom.

In addition, if and to the extent that this announcement is communicated in, or the offer of the securities to which it relates is made in, any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the "Prospectus Directive") before the publication of a prospectus in relation to the securities which has been approved by the competent authority in that Member State in accordance with the Prospectus Directive (or which has been approved by a competent authority in another Member State and notified to the competent authority in that Member State in accordance with the Prospectus Directive), this announcement and the offer are only addressed to and directed at persons in that Member State who are qualified investors within the meaning of the Prospectus Directive (or who are other persons to whom the offer may lawfully be addressed) and must not be acted on or relied on by other persons in that Member State.

The offer of the above securities and the distribution of this announcement and other information in connection with the offer of the above securities in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement is not an offer of securities for sale into the United States. The securities have not been, and will not be, registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an exemption from registration. There will be no public offer of securities in the United States.