An Introduction to HSBC Insurance

April 2008

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Forward-looking statements

This presentation and subsequent discussion may contain certain forward-looking statements with respect to the financial condition, results of operations and business of HSBC Holdings plc and HSBC Bank plc. These forward-looking statements represent the bank’s expectations or beliefs concerning future events and involve known and unknown risks and uncertainty that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Additional detailed information concerning important factors that could cause actual results to differ materially is available in both Annual Reports.

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Introduction

• A rapidly growing global insurer

• Distribution capability in over 50 countries and territories worldwide

• In 2007, HSBC’s insurance businesses generated:– USD9.1 billion net earned premiums– USD3.1 billion profit before tax (13 per cent of total Group PBT)

• Over 10,000 staff employed in insurance worldwide

• Access to a potential in-house customer base of over 128 million customers and companies by joining-up the Group

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Our history goes back 200 years

20 per cent of Associated Bankers Insurance co (Hang Seng’s associated company)

Antony Gibbs Holdings Ltd (20 per cent) of participation

Wardley Swire Assurance

Arthur Weller

East Point Reinsurance co Middle East Insurance Holdings Al Sagr East Ins Co of Saudi Arabia

Acquisition of Antony Gibbs

Marine Midland

Bamerindus SegurosBanco Roberts SA

CCF Life/ERISA

10 per cent Ping An Ins CoGrupo Financiero Bital, SA

Household Bank of Bermuda

EE Cooper & Co –Insurance Brokers

Antony Gibbs & Sons Ltd

20 per cent of Malayan Group of Companies, through Mico Equities Inc (Wardley Insurance)

1808 1965 1973 1976 1978 1979 1980 1987 1997 2000 2002 20031874 1977 1984

Hartley Cooper & Co Ltd

1992

Midland Bank

2006 2007

Grupo BanistamoJoint Venture Malaysia

• Erisa 100 per cent• Hana Life Korea• Bao Viet• Joint venture India• Joint venture

China• SABB Takaful

Company (Saudi Arabia)

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Asian Update

• Rapidly growing regional presence – strong PBT in 2007

• Joint ventures / strategic investments in Vietnam, Korea, India, Malaysia, China

• Manufacturing capabilities went from 3 to 8 Asia Pacific sites

• Winner Asian Banker ‘Excellence in bancassurance’ awards, 2007

• Asia (including Ping An) generated 39% of 2007 PBT

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34% 53%

13%

Manufacturing

Distribution excl Ping An

Ping An

PBT by type of business, 2007PBT by region, 2007

27%

14%

20%

13%

26%

Asia excl Ping An Ping AnEurope Latin America

North America

Our insurance business is well-balanced and growing

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Overview of HSBC Insurance

• HSBC manufactures life, pensions and investments products within HSBC Life (UK) for distribution through the HSBC network and external IFAs

• GI products are distributed through HSBC network, First Direct and Marks and Spencer storesThese products are underwritten by 3rd party insurance companies, with a JV currently being formed with Aviva Norwich Union. Other parties include Allianz

• Insurance broking• Reinsurance services in Ireland• Actuarial consultancy and pension services• Health insurance underwritten by Westfield Contributory Health Scheme Limited

UK

• ERISA and ERISA IARD• Distributes life insurance, GI and

investment products, exclusive distributors of insurance through HSBC’s network of member banks (includes HSBC France and 10 regional banks)

France

• 25.9 per cent stake in HSBC Insurance Brokers (India) Private Limited− Insurance broking

company− Direct and

reinsurance broker− JV with OBC and

Canara Bank being formed

India

• HSBC Insurance (Asia Pacific) Holdings Limited – 100 per cent owned

• HSBC Life (International) Limited – 100 per cent owned

• HSBC Insurance (Asia) Limited – 100 per cent owned

• Hang Seng Life and Hang Seng Insurance Company Limited – subsidiaries of Hang Seng bank (62.14 per cent owned by HSBC)

Hong Kong

• Malaysia− HSBC Amanah Takaful

− 49 per cent JV with Jerneh Asia Berhad and The Employee Provident Fund of Malaysia

− Offers Shariah-compliant insurance (home, fire, motor, mortgage) underwritten by Syaikat Takaful Malaysia Berhad

• Macau− Established HSBC Life branch in 2006

• Singapore− HSBC Insurance (Singapore) Limited

− 100 per cent owned• Vietnam

− HSBC participated in the IPO and acquired a 10 per cent stake in Vietnam’s leading insurance and financial services group, Vietnam Insurance Corporation (Bao Viet)

• South Korea− HSBC Hana Life partnership 2007

Rest of Asia

• 16.8 per cent stake in Ping An Insurance• Beijing HSBC Insurance Brokers Limited – 24.9 per cent owned JV

− Partnered with Shanghai Hua Yu Asset Management and Beijing Zhang Ke Engineering Company

• CEPA partnership with National Trust

China

• HSBC Seguros – 100 per cent owned

• Long-term distribution agreement whereby HDI, a subsidiary of Talanx, offers GI products through the HSBC Brazil branch network following the 2005 sale of HSBC GI arm to HDI

Brazil

• HSBC Insurance Agency (USA) – 100 per cent owned

• Offers life insurance and also underwrites

• Offers credit protection to 50 million HSBC finance customers

USA

• HSBC Seguros – 100 per cent owned• HSBC Afore – 100 per cent owned• HSBC Pensiones – 100 per cent owned• Seguros provides a range of Life and

GI products; products are distributed through bank branches

• HSBC Pensiones provides annuities and survivorship insurance

Mexico

• HSBC La Buenos Aires Seguros – 100 per cent owned

• JVs with New York Life− Maxima – 59.99 per cent owned

− Specialises in pensions− HSBC New York Life

• A top three market share leader• Distributes through HSBC’s insurance

brokerage arm and the network of more than 2,000 points of sale

Argentina

• Grupo Banistmo bought in 2006, with presence in Panama, Honduras and El Salvador

Central America

• SABB Takaful Company JV− Offers Shariah-compliant

solutions• Insurance Brokers Limited

operates in the Middle East through the brand HSBC Insurance

Middle East

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Vision: A world-class bancassurer with an aim to double PBT contribution to 20 per cent

• Belief in Bancassurance within a multichannel delivery strategy

• Six strategic initiatives:– Top ranking Life/Pensions and Investment provider– World-class ethical credit protection insurer– Improved management of Group Self Insurance programme– Working with Preferred Strategic Partners to gain scale– A focused, profitable insurance broker, supporting Commercial Banking and Global Banking and Markets clients

and third parties– Operational efficiency: more customer satisfaction and Straight Through Processing (STP)

• Drive manufacturing excellence based upon STP

• Establish HSBC Insurance c brand – with high-quality ‘brand experience’

• Best place to work – high IQ, challenging, collegiate and financially rewarding

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Bancassurance focused on Life, Pensions and Investment

• 75 per cent of all wealth in the hands of those older than 55

• These individuals and their assets need protection (insurance) and investments

• Ageing is accelerating this shift as old borrowers de-leverage

• Equally applicable in developed and emerging markets

• This ‘sea change’ is too big an opportunity to miss and should build on HSBC credit credentials

*Source: US Federal reserve , 2004

Financial needs map

Age

Wea

lth

Youth

High

LowInsurance investment

needs

Bank (Credit) Products

Old

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Credit enhancement

• Important, logical business

• Operating in 28 countries

• Ethically sold

• Meets real customer needs in OECD and emerging markets

Value to customer

Value to HSBC

Eg• Travel accident• Purchase protection

Included/Packaged

Eg• Credit life• Accident, sickness, health• Unemployment• Special event payment breaks

Credit protection

Eg• Identity protection• ATM safe

Enhanced/Add-on

Eg• Personal accident• Hospital cash• Travel

Ancillary

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Current partnerships

Global

AIG

Multi-region Allianz/Axa/ING/

Zurich

Single-RegionAssurant/Mapfre/

Old Mutual

Niche

Ace/Cigna

Exceptions

IHO approval

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Summary

An international business focused on key geographies

An integral capability within the HSBC Group

Aim to double insurance contribution to Group profits through a mix of organic and joint ventures