Update re Friends Life Group plc Notes

8 November 2012

RESOLUTION LIMITED

Friends Life Group plc issuance of Reset Perpetual Subordinated Notes

Resolution Limited ("Resolution" or the "Company") announces that on 8 November 2012 its subsidiary, Friends Life Group plc ("Friends Life"), completed an issuance of US$ 575 million Reset Perpetual Subordinated Notes (the "Notes") with a coupon of 7.875%, guaranteed by its principal subsidiary, Friends Life Limited.

Friends Life will utilise £200 million of the net proceeds from this issuance to redeem in full the internal Tier 2 instrument owed to Resolution. Friends Life will also transfer a further £150 million to Resolution by way of a dividend. The Company intends to apply these proceeds, supplemented by additional cash resources already held at Resolution, to make early repayment in full on 20 November 2012 of the outstanding principal and accrued interest on the Deferred Consideration Notes ("DCNs"). The DCNs were issued by the Company in connection with the acquisition of the AXA UK Life Business, bear an interest rate of 6.5% pa, and would otherwise have been due to amortise over the next 6 years. Following the repayment of the DCNs, the group's external cash commitments will reduce by approximately £60m per annum as a result of the removal of the requirement to amortise the DCN's. However there will be an increase in the net pre-tax interest costs at Friends Life level of approximately £10 million per annum.

Following this exercise, the Company will no longer hold any debt instruments issued by Friends Life and will have no external debt outstanding. The Company remains committed to its ordinary dividend and this exercise increases the ordinary dividend cover.

For further information, please contact:

Investors/analystsNeil Wesley, Resolution Operations LLP +44 (0)20 3372 2928

MediaAlex Child-Villiers, Temple Bar Advisory +44 (0) 7795 425580

Notes to Editors

The Notes are guaranteed on a subordinated basis by Friends Life Limited and from the issue date until the interest payment date in November 2018 (the "First Reset Date") will bear interest at 7.875% per annum, payable semi-annually in arrear. In respect of each successive six year period thereafter, the Notes will bear interest at a rate equal to the six year US Dollar mid swap rate plus a margin. Subject to compliance with applicable regulatory requirements, Friends Life may redeem the Notes at its option on the First Reset Date or any interest payment date thereafter or at any time upon the occurrence of certain tax or regulatory events.

The Company's ordinary shares were admitted to the Official List and to trading on the main market of the London Stock Exchange in December 2008. The Company transferred to a Premium Listing as it completed its first acquisition, Friends Provident Group plc, on 4 November 2009 and is subject to those provisions of the Listing Rules that apply to overseas companies with a Premium Listing. The Company completed its second acquisition, the majority of the AXA UK life business, on 15 September 2010. On 31 January 2011, the Company completed its third acquisition, the shares and business of Bupa Health Assurance Limited.

A copy of this announcement is and will be available, subject to certain restrictions relating to persons resident in restricted jurisdictions, for inspection on the Company's website at www.resolution.gg

For the avoidance of doubt any other information contained on the Company's website does not form part of this announcement.

END