Marketplace

Our vision is to be the best partner for our customers' lifetime financial needs.

Excellent Customer Service

As a company, Eagle Star has a strong commitment to customer excellence in the marketplace. Eagle Star believes that serving the customer is central to the future of its business and strives to give them superior value and outstanding service. It has won the industry's Service Excellence Award eight times and the Most Improved Service Award. We improved our Awards' score in 2002, achieving first place in the 'administration service' category and first place for 'attitude of insurance staff'.

To achieve this high level of service, our customer support areas are divided into small highly focused specialist teams. Each team is a single point of contact and has ownership and responsibility for a complete and personalised service to our customers. We have an experienced trained and expert staff who care about what they do and are committed to continual training in technical expertise and servicing skills.

Findings of the IBA Service Excellence Survey 2002

Source: IBA Service Excellence Survey 2002.

The above graph indicates how well Eagle Star has performed relative to the best in the marketplace and the market average in 2001 and 2002.

With an overall score of 61.55% (60.24% in 2001) Eagle Star outperformed the market average of 57.92% (58.5% in 2001). This result places Eagle Star in overall third position and first in the administration service categories.

Eagle Star finished third place overall, maintaining its ranking in the survey but increased its score from the previous year and narrowed the gap to the leaders significantly.

LIMRA carry out a broker opinion survey every year which provides us with valuable data such as the frequency with which brokers visit websites of life companies, the products and services they rate highly and how the various companies are perceived in terms of quality or innovation.

Eagle Star finished third place overall in the LIMRA Survey in January 2003 and climbed two places in the LIMRA rankings with significant improvements across the board.

A recent letter received from an intermediary stated, "We are very happy with the excellent service provided by you and your colleagues. Every case, be it big or small is given top class priority". October 2002

Customer Solutions

We also attribute our service success to the fact that we recognise that each of our external Stakeholders; intermediaries, trustees of pension schemes, members of group schemes or individual clients, all have different needs. Eagle Star aims to go beyond 'customer administration' and provide a 'customer solutions' service. In other words, we listen to our customers. We deliver core key services as standard and within pre-agreed timescales. This means we can honestly say that we deliver on our promises. Personalised service, efficient customer management and accurate record keeping are all part of a normal working day at Eagle Star. We are also good at creating relationships with key customers or customer groups e.g. An Post and the Irish Medical Organisation.

"The information you supplied was delivered quickly, well put together and easy to read."
Eagle Star Customer, February 2003

The majority of Eagle Star's business is generated via intermediaries who have agencies with Eagle Star. Business is transacted by a qualified financial advisor within the brokerage who provides the customer with appropriate advice and ensures a product that best suits the personal circumstances, needs and objectives of the customer is recommended.

Eagle Star also has important customer safeguards in place. For example, a documented internal complaint procedure, which complies with the strict guidelines, laid down by the Insurance Ombudsman's office. We have a policy of addressing a customer's complaint within 3 working days and we record and monitor complaints regularly to ensure they are being dealt with effectively and to the customer's satisfaction. In this way we can ensure that lessons are learned which can be used as a basis for identifying improvements in service quality and improvements in business procedures.

Business Integrity

All business activities are based on the fundamental principle of observing the highest standard of integrity at all times. Eagle Star's reputation for professionalism, reliability and integrity is one of its most important assets. All employees are expected to maintain high ethical standards in their dealings, follow good business principles and avoid practices which might damage the company's reputation.

As part of Zurich Financial Services, the Eagle Star management team and employees in key positions in the company sign off each year to acknowledge their acceptance and adherence to Group compliance standards and core values. Each employee has a responsibility to maintain the trust placed in the company by its customers, shareholders, business partners and other employees and to protect confidential data relating to them. Such information must be safeguarded.

A written procedure is in place for employee's disclosure of gifts and benefits in kind. Eagle Star also has a strict money laundering procedure in place, which is communicated to all staff and managers are fully briefed in this area.

Eagle Star has in place a specialist compliance function, which ensures that all independent intermediaries, who sell Eagle Star products, are regulated and authorised by the Central Bank. This ensures greater professionalism and that customers are satisfied and will trust Eagle Star products now and in the future. All intermediaries have standard agency agreements with Eagle Star, which are cancelled in the case of non-compliance.

Eagle Star issues all its customers with informative product guides to ensure that they make an informed purchase decision. Customers have an opportunity to cancel their policy within 15 days of receipt of policy documentation, if they feel it does not meet their needs. The company also has internal business procedures in place to help advise customers who might let their policies lapse and could be at risk of losing valuable financial protection.

Investment Security for our Customers

When people make an investment with Eagle Star, they want investment performance and security. We deliver these twin objectives through our investment strategy and investment management processes. The objective of Eagle Star's investment strategy is to achieve above average investment performance each year while carefully managing risk. By doing so we expect to produce top quartile performance in the long-term.

Controls & Investor Safeguards

Eagle Star provides good customer and investor safeguards through the operation of a
Front Office, Back Office system. For example, there is clear segregation of duties between the investment dealing area and the cash settlement and accounting and reporting functions.

To ensure independence and give extra security to our clients, Eagle Star chooses to use an external custodian who is not part of the Eagle Star or Zurich Group. Eagle Star uses Citibank as custodian across all funds managed by Eagle Star. We believe that holding securities at a third party custodian is best practice in this key area.

Financial Dealing - Arms Length Relationships

Eagle Star maintains a list of approved financial institutions with whom we conduct banking business. This division of deposit and foreign exchange dealing among a panel of financial institutions ensures that risk is reduced by keeping within acceptable exposures to different financial institutions and thus protecting the funds.

Similarly, we maintain a panel of stockbrokers with whom we may transact share dealing and bond dealing business. The panel consists of Irish and international stockbroking firms and financial institutions.

To ensure independence we do not use banks or stockbrokers that are part of the Eagle Star or Zurich Group. By undertaking our financial dealing activities with institutions who have no direct relationship with Eagle Star we ensure that we always receive competitive rates on behalf of our customers.

Advertising

Eagle Star complies with the standards laid down by the code of Advertising Standards Authority for Ireland (ASAI) for all its advertising. The ASAI has never issued an investigation into Eagle Star's advertising. Eagle Star also adheres to the guidelines for advertising as set down by the Irish Insurance Federation.

Safeguards for our own business

A business recovery plan has been prepared to understand the crucial risks and exposures of the company and is designed to ensure a rapid response to any situation that may disrupt operations or control of the business.

Supplier Support

Eagle Star has in place a policy for payment of all bills within 30 days. As a member of IBEC we have signed an agreement for a code of practice on 'Prompt Payments'. The code is designed as a voluntary mechanism to promote good business practice in respect of accounts settlements. The Prompt Payment Code has been incorporated into our existing procedures and it requires that we:

• Have a clear and consistent policy to pay bills in accordance with contract.
• Ensure that the finance and purchasing departments are aware of the policy and adhere to it.
• Agree payment terms at the outset of a deal and stick with these terms.
• Do not extend or alter payment terms without prior agreement.
• Provide suppliers with clear guidance on payment procedures.
• Ensure that there is a system for dealing quickly with complaints and disputes and advise suppliers without delay when invoices, or parts of invoices are contested.

The Eagle Star accounts department has put in place procedures to ensure that we adhere to the code of practice for 'Prompt Payments'. This ensures that we have no major issue with suppliers with regard to payment of bills.

Marketplace Summary

In terms of financial products Eagle Star Life is renowned for innovative product design, delivering a quality product and investment security which operates in a sound and ethical manner. Our customer service standards are high but there is still room for improvement.

Over the next year, we plan to:

• Improve customer communication.
• Continue our progress towards customer solutions and not just products.
• Put in place better stakeholder measures.
• Put in place an annual measurement process to further reduce the number of complaints received on an annual basis.
• Collate unsolicited letters of endorsement from customers in order to use this data as a future CR measurement.
• Put in place an annual measurement process on payment of bills. While we adhere to the code of practice for 'Prompt Payments' as part of our normal business practice we do not have a measurement in place to show how effective this is.