Diversified distribution		Advice Workplace Direct Alliances
Strong market positions		Top 2 Individual Life insurance sales Top 2 Group Life insurance market share Top Direct Life insurance market share
Sales delivery		Life insurance new business up 54% Significant new Group Life mandates won
Manage claims well		Claims broadly in line with expectations Increased investment in claims management personnel proving effective
Business simplification		Rationalising product offerings Continue to standardise and automate processes
Lapses and expenses management		Sound lapse management Unit cost improvements
Service		Improvement in culture and performance Renewed commitment to high quality service outcomes for advisers and customers Service levels generally exceeded benchmarks
Risk management		Good improvement in overall risk culture with risk management embedded in business as usual processes

Retail Life

TOWER Australia's Retail Life insurance business is committed to the Independent Financial Adviser (IFA) channel as the principal method for Australian's to obtain life insurance cover supported by high quality financial advice. We continue to focus on driving change through this market to provide advisers and their customers with greater access to life insurance products fulfilled in the most efficient and cost effective manner.

TOWER Australia introduced its Accelerate product in 2008 to complement its existing life insurance product range in the IFA channel. Accelerate was revolutionary in Australia and dramatically altered the way advisers and consumers could obtain life insurance. During 2009 the Retail Life insurance business has evolved its product offering further, introducing the next generation of online application, underwriting and fulfilment processes with the launch of Accelerated Protection.

Accelerated Protection is a market leading product supported by an end-to-end technology and service proposition. It leverages the best of TOWER Australia's existing product offers and experience in a new comprehensive 5 star product that provides major benefits to advisers and their customers through an easier, faster and more efficient new business process. Technology supported underwriting tools backed by a teleunderwriting service allows TOWER Australia to set an industry benchmark of 85% of all underwriting decisions being made within three working days. Some applications were able to be processed within hours rather than the historic industry standard of up to six weeks.

The Retail Life insurance business grew strongly in 2009 with both inforce premium and new business growing well ahead of market growth rates. TOWER Australia is a top two provider of life insurance through the IFA channel in terms of sales. The goal of the Retail Life insurance business is to be the leading life solutions provider to financial advisers who are advising consumers with more complex needs.

TOWER Australia's was proud to be named as the Best Life Insurance Company in the 2009 Australian Banking and Finance Magazine Insurance Awards, judged by a panel of experts.

Group Life

The Group Life insurance market is an integral part of TOWER Australia's distribution strategy to make life insurance available to as many people as possible in the manner of their choice. Today, many Australians are obtaining some or all of their life insurance needs through Group superannuation or workplace schemes. Annualised premium growth of 18% for the year to 30 September 2009 makes this one of the fastest growing sectors of the local life insurance market.

TOWER Australia's focus on member service and innovative benefit design backed by modern technology has driven the success of its Group Life insurance business and has been the differentiator in the business winning a number of significant Group Life insurance mandates during 2009. The recent appointment as the life insurance provider to one of Australia's largest Industry Funds, AustralianSuper, and its 1.4 million members reflects TOWER Australia's strong position and reputation in the Group Life insurance sector.

The Group Life insurance business also works closely with all its clients to ensure they have both a contemporary and sustainable insurance offering and access to the best technological solutions for their members. The implementation of Insurance Online for a number of our Group Life insurance clients continued the drive to improve underwriting and claims turnaround times and has created greater transparency for Superannuation Fund Trustees and their members. TOWER Australia is a recognised leader in this technology.

Inforce premium in the Group Life insurance business has grown to around $370 million with the commencement of the AustralianSuper mandate on 1 November 2009 making TOWER Australia a top two Group Life insurance provider in terms of market share of inforce premium. The goal of the Group Life insurance business is to be the leading life solutions provider in the Group superannuation and employee markets.

The strong performance of this business was recognised during the year with TOWER Australia being named the inaugural Group Insurer of the Year by the industry publication, Super Review.

Direct and Alliances

InsuranceLine, TOWER Australia's direct-to-customer offering provides simple financial protection. Advertising and marketing is principally through mainstream media channels supported by highly efficient call centres and effective back office functions for the handling of all applications and claims.

Having pioneered the direct life insurance market in Australia, InsuranceLine continually faces new entrants but remains singularly focussed on innovating its life insurance offering by providing simple products, an integrated service model and quality customer service. Following the purchase of InsuranceLine in October 2008, the business was successfully merged with TOWER Australia and had a good year with steady growth during 2009. InsuranceLine now has close to 200,000 customers and is Australia's top provider of direct life insurance in terms of both sales and inforce premium. InsuranceLine's goal is to be the leading direct life insurer to Australians.

TOWER Australia's Alliances business strategy is to offer non-life insurance businesses in Australia the ability to provide their customers with the benefits of life insurance protection with minimal financial and capital investment.

During the 2009 year the Alliances business was transferred into the InsuranceLine model and began to leverage the InsuranceLine customer management and call centre capability to existing Alliance partners and their customers. The success of the Alliance model has seen it retain established relationships and grow through the development of new partnerships. TOWER Australia's goal is to expand its distribution through Alliance partnerships as a key part of the overall strategy of making life insurance more readily available to all Australians.

Investments

TOWER Australia's Investment business provides diligent stewardship and management of the retirement savings of Australians. The business had $2.9 billion of funds under management and advice as at 30 September 2009 but is largely closed to new business.

Investment management is outsourced to the global investment manager, Russell Investment Management and custody and unit pricing is outsourced to the custody specialist, State Street Australia Limited. This arrangement is working well and is delivering sound results for investors and for TOWER Australia.

A robust compliance regime and strong service disciplines enabled the business to consistently achieve its target service levels to customers and advisers during 2009. Initiatives to simplify the business and reduce product and system complexity resulted in significant productivity improvements and steadily improving cost ratios.

In the year ahead, TOWER Australia's Investment business will be seeking to further steamline its operations, further improve its customer service and processes and maintain high levels of compliance with regulatory requirements.